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Maximising Fixed Deposit returns: An investment strategy

Are you looking for an investment that secures your savings and earns competitive interest returns? Open a Fixed Deposit. The investment vehicle reaps stable returns and is not linked to market volatility. FDs are ideal for every investor, whether you are a young professional or an individual nearing retirement. FD helps meet all your financial goals systematically. 

A significant advantage of a Fixed Deposit is it is a passive investment. You need not track your FD to grasp expected returns. FD returns depend on the interest rates offered. FD rates are subject to change. You will find all details about the changes on your depositary’s portal. Following are some key points to consider for maximising FD returns: 

Switch to multiple FDs 

‘Never put all your eggs in the same basket is an investment advice many may have given you. It may sound cliché, but the investment tip works incredibly well in reality. Rather than having a single large FD switch to multiple FDs. This practice helps you achieve high liquidity with your investment. Suppose you hold one FD of Rs. 10 lakh. A sudden financial requirement of Rs. 1 lakh needs to be met. You can break the FD of Rs. 10 lakh to fund your requirement. 

This leads to losing out on interest gains. However, if you hold 10 FDs of Rs 1 lakh each, you can break one instead of all. This ensures your financial requirement is met and you do not lose out on interest gains. Plus, now need not visit the bank to fulfil your investment requirements. You can invest and redeem your FD online through Online Banking. 

Diversify FD investments

Diversification secures and improves your investment returns. You can diversify your FD by investing with various depositaries. You can invest in FDs with banks, other financial institutes, and corporate companies. The interest rate offered by each varies. Generally, NBFC and corporate companies offer a higher interest rate than banks. Consider opening an FD Account with all three depositories to boost your returns. 

Remember to check their reputation before investing. With NBFC and corporate companies check their credit rating to establish their credibility. 

Avoid making premature withdrawals

The longer you stay invested in FDs, the better the returns. Avoid making a premature withdrawal from your FD. If you have a financial requirement that needs to be met, you can apply for a Loan against the FD. Almost all leading banks offer Loans worth 90% of your FD value. Avail this facility to fund your requirement and keep your investment intact. 

You can apply for a Loan using your Banking app. It is the simplest way to get a formal source of funds. Complete a simple application and documentation process. On approval, the Loan amount gets credited to your account instantly. 

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