Invest In The Best FD Schemes And Earn Good Returns
As a prudent investor, you like to multiply your returns. When interest rates are high, fix term deposit interest rate by investing in the best FD scheme.
Having an FD in your investment portfolio ensures that you earn good returns with minimum risks. In the general understanding, the best FD scheme is one which offers a higher interest rate. Interest rates are the deciding factor. Before you choose the best FD scheme in bank, you’ll need to look at other aspects like:
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tenure of the Fixed Deposit
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charges levied on withdrawal before maturity
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service offered
With a number of Fixed Deposit schemes available, it can get difficult to choose where to park your funds. The following tips can serve as a guide to help you decide on choosing the right Fixed Deposit scheme.
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Compare The Interest Rates
If you’re investing to earn higher returns, you should choose a scheme that offers the highest interest rates. Fixed deposit interest rates vary across banks and other financial institutions. Interest rates are still the prime criteria in the choice of Fixed Deposit scheme. You will also need to rate other advantages offered by the scheme, like tax saving deposits.
Banks/NBFCs offer a higher interest rate for senior citizens which is about 0.5% more than the rate to the general public. If you’re 60+, you can choose the best FD scheme for senior citizen.
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Offer of Flexible Tenures
It is a well-known fact that you can’t break FD’s before maturity without paying a penalty. So, the tenure of the scheme that you choose must offer flexible tenures. Suppose a scheme offers a tenure ranging from 11 months, 29 days to 730 days. You can choose a short term Fixed Deposit to meet your cash needs after a year. To get a higher interest rate on fixed deposit.
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Deposit Insurance Coverage
As per RBI guidelines, Fixed Deposits with commercial banks and cooperative banks are covered by deposit insurance. Fixed Deposits with NBFCs are out of the purview of deposit insurance. When you choose a Fixed Deposit scheme, it is best to choose one that enjoys the protection of deposit insurance policies.
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Fees and Charges
There are some fees and charges associated with Fixed Deposits like charges for premature withdrawal. Choose a scheme that keeps charges and fees on the lower side of the scale.
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Availability of Auto Renewal Option
Auto renewal feature ensures that the maturity is reinvested immediately at the end of the FD term. Otherwise, you will have to keep track of the maturity date, have the FD receipt discharged, take the credit into your bank account and re-apply for a fresh Fixed Deposit. These hassles and administrative procedures can be avoided if the auto renewal facility is available and is activated.
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Tax Benefits
The interest earned on FD is taxable and you’re taxed as per your tax slab. If you find a tax saving Fixed Deposit scheme that gives you returns plus tax benefit, it is better to choose the tax saving deposit scheme. Of course, such schemes have a mandatory lock-in period (5 years).
Listed below are the best FD rates for 6 months
Karnataka Bank 7.15%
Repco Bank 7.00%
Ratnakar Bank 7.00%
Where to Park Your Fixed Deposit
Fixed Deposits can be held with banks, NBFCs and companies. Companies do offer a rate higher than banks. If company Fixed Deposit is your choice, then it’s best to invest in companies which have a proven track record. Also choose NBFCs whose Fixed Deposits have been accorded the highest credit rating.
