How to Invest in Fixed Deposit

1. Interest rate

Compare the offered FD interest rates across different banks or financial institutions to ensure you get the best return on your investment.

2. Tenure

Choose a tenure that aligns with your financial goals, whether short-term or long-term.

Interest Payout Frequency: Decide if you want periodic interest payouts or prefer to accumulate your earnings until maturity.

3. Lock-in period

Be aware of any lock-in periods associated with the fixed deposit, as premature withdrawals may incur penalties.

4. Liquidity needs

Consider your liquidity requirements; fixed deposits are less liquid compared to savings accounts.

5. Taxation

Understand the tax implications of interest income and whether the fixed deposit qualifies for tax benefits under Section 80C.

6. Credibility of the institution

Invest in fixed deposits offered by reputable and well-established banks or financial institutions.

7. Penalties for early withdrawal

Familiarise yourself with any penalties or reductions in interest rates for premature withdrawals.

8. Auto-renewal

Determine whether the fixed deposit automatically renews upon maturity or if you need to provide instructions.

9. Nomination

Consider nominating a beneficiary to ensure a smooth transfer of funds in case of unforeseen circumstances.

Conclusion

Investing in fixed deposits (FDs) is a secure way to grow your savings while minimising risk. FDs offer stable returns, ideal for short and long-term goals. Assess your financial objectives, compare interest rates, and choose a tenure that suits your needs for dependable, steady wealth growth.

Calculate your expected investment returns with the help of our investment calculators