People seeking safe and secure investments with guaranteed returns should consider Fixed Deposits or FDs. Many banks and financial institutions in India offer fixed-income savings accounts with varying interest rates. FD rates in India are at their best right now, and we’ll explain how to ride the interest rate wave using an FD interest calculator.
The first step is understanding what Fixed Deposits are and how they work. Usually, Fixed Deposits range from one month to ten years and consist of a sum of money deposited with a bank or financial institution for a fixed period of time. Deposit interest rates are fixed for the deposit term, and interest is calculated based on the main amount, the interest rate, and the term. The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures depositors up to a limit of Rs. 5 lakhs per depositor per bank, making FDs one of the safer investment options available.
Indian FD interest rates are affected by various factors, including inflation, market conditions, and the RBI’s monetary policy. Various financial institutions and banks compete to offer customers the best interest rates. Below are a few things one can do to get the best FD rates in India.
Compare interest rates and do your research.
Comparing interest rates offered by different banks and financial institutions is a good idea before investing in an FD. Even within the same bank, FD interest rates can vary widely. Deposit terms and amounts vary based on the length and amount of the deposit. Comparing interest rates online will help you determine which bank offers the most competitive rates and favourable terms.
Invest in a long-term strategy.
Long-term deposits have lower interest rates than FDs. Despite short-term deposits offering better liquidity, longer terms can maximize your returns by allowing you to take advantage of higher interest rates. Consider your financial goals and needs before choosing a term.
Take advantage of tax-saving FDs
An investment in a tax-saving FD could save you money on taxes. The Income Tax Act allows FDs to be deducted up to Rs. 1.5 lakh per year under Section 80C. Regular FDs offer higher interest rates than tax-saving FDs, which usually have a five-year lock-in period.
Senior citizen FDs are worth considering.
Banks and financial institutions offer seniors special FD schemes with higher interest rates. The additional interest rate on senior citizen FDs is usually 0.25% to 0.5%, accumulating over time.
Don’t miss out on promotional offers.
Banks and financial institutions occasionally offer FDs at higher interest rates or other benefits. Don’t miss out on these offers. Take advantage of them to maximize your returns.
An investment portfolio with laddered FDs is a good idea.
Investing in laddered FDs involves holding multiple bonds with varying maturities. It also provides greater liquidity and reduces interest rate risk. Each maturing FD can be reinvested in a new FD with a higher interest rate as the principal and interest mature. The best rates will be available to you as a result.
It is possible to ride the interest rate wave and make the most of the best FD rates in India by comparing interest rates, investing in long-term FDs, taking advantage of promotional offers, and creating a laddered FD portfolio.
Returns that varyÂ
However, it’s vital to keep in mind that FDs do not offer high yields. Even though they are considered safe and offer guaranteed returns, other investments like stocks or mutual funds may provide greater returns. When investing in FDs, evaluating your financial goals and needs is important, as diversifying your portfolio minimises risk and maximises returns.
The inflation rateÂ
You should also take inflation into account when calculating your FD returns. Inflation can erode your returns over time, so choosing an interest rate above inflation is essential. It’s important to stay up-to-date on changes in interest rates because the RBI adjusts them periodically based on inflation and other economic factors.
As a result, investing in FDs can provide a great way to minimize risk while earning guaranteed returns. The best FD rates in India can be achieved by researching, choosing an interest-rate-competitive bank, and diversifying your portfolio.Bajaj Finserv Fixed Deposits offer competitive interest rates, which can help you maximize your returns or assess them with an FD interest calculator.
 Its FDs offer some of the highest interest rates in India, with regular customers earning up to 6.85% interest and senior citizens earning up to 7.10% interest. A hassle-free application process and flexible tenures ranging from 12 to 60 months are also offered. CRISIL’s FAAA rating for Bajaj Finserv’s FDs also guarantees high safety and stability with guaranteed returns.
