Fixed Deposits (FDs) are one of the most popular financial products we offer to our clients. FDs are a safer option than equity investments. Before you invest, it is important to understand the returns. When your goal is to minimise risks, FD is your investment. Additionally, it will assist you in achieving your long-term financial goals, such as retirement income, home ownership or paying for your child’s education. There are many ways to get the Best Fixed Deposits interest rates in India. Let’s have a look at them.
How to Get The Best FD Rates in India
Maximising FD Returns
Compounding your investment is the best approach to gain big from your fixed-income investment. In this scenario, you begin to receive interest on interest since your interest sum is again invested in the FD. When starting an FD, you may decide whether you want to receive monthly, quarterly, or annual interest payments. Wisely pick your reinvestment choice to boost the returns.
Choose Short-Term Deposits
Select shorter-term deposits whenever you extend your current FD or invest money in a new FD. By selecting shorter-term, such as a year or less, in the present market, you may avoid putting your cash up for a lengthy period and benefit from interest rate hikes when they happen. Try to understand which FD is best because getting an answer to this question is related to you goal. RBL Bank’s digital Fixed Deposit schemes offer a wide and convenient option for all. Check out their fixed deposit plans for more information.
Use The FD Laddering Technique
FD laddering is a terrific approach to ensure a solid return on investment, even if interest rates climb as a result of the current state of the economy. You can design your FD laddering strategy by dividing your lump payment across different FDs based on their maturity.
With the FD ladder approach, you can guarantee that your average return is better overall and you avoid having all your contributions trapped at once at the lowest interest rate possible.
Avoid Early Withdrawal Charges
It is recommended to keep a Fixed Deposit until the end of its term. Avoid early withdrawals to let your funds grow. People could occasionally feel the need to liquidate their FDs to handle urgent cash flow issues. They should keep in mind that withdrawing too soon can result in fines. Selecting an overdraft against a Fixed Deposit would be preferable. You are eligible for up to 90% of your FD balance as an immediate overdraft. While checking which FD is best, find whether the overdraft facility is available or not.
Look For The Interest Penalty
Wait until the interest rate increases when you already hold low-rate FDs before moving. The interest rate for early withdrawal must be lower than the interest you would get by renewing at a higher rate. For instance, if you leave your existing Fixed Deposit (FD), which pays 5% annually, you would have to pay a 0.5% penalty, and your effective rate would drop to 4.5%. However, you will get the profit despite the fine if the new FD provides you with 6% p.a.
These are the top ways to help you maximise profits on an FD directly or indirectly. Finding the best FD rates in India is easier today with the rising competition among banks and other financial institutions. We provide exclusive schemes based on the customer age group and provide them with additional interest rates, so consider RBL Bank for the best FD rates.