Fixed deposits were once considered as the best way to invest your money. They offer excellent returns and also keep your money safe. But now people are becoming more vigilant and are looking for ways to earn better interest rates on FD from the same. If you are also looking out for the best ways then you must have a look at this article and earn a better rate of interest on your investments.
Do not discontinue your fixed deposit
As fixed deposit interest rates are higher for more extended periods, many people prefer longer terms. Still, they end up prematurely withdrawing their fixed deposits. This results in losses because you only get interested in premature withdrawals until the day you’ve been invested. A withdrawal penalty is also available.
You can take out a loan against Fixed Deposit instead if you need funds. The interest rate on loan is a little low, too. You can build a Fixed Deposit Sweep-in Account if you frequently need money.
Plan out on using cumulative schemes
The interest is not paid out in Accumulated Term Deposits, but it is reinvested. Re-investing earned interest gives you a compounding effect on your savings in Fixed Deposit. This is a safe way to increase the returns from your Fixed Deposit assets if you do not need a source of income.
At regular intervals, Non-cumulative Fixed Deposits pay out interest. So, there is no compounding effect they sell. Non-cumulative Fixed Deposits, though, are a decent way to get daily revenue.
Look for additional rates
Fixed deposits are one of the best investment choices for raising your investments in today’s times of fluctuating equity indexes and high market volatility. With dropping FD interest rates, the returns on your FD might not be as high as you hoped. However, by searching for additional rate advantages, you can still increase your savings. It is best to look for issuers that offer the right combination of safety and attractive returns.
You must check your investments
Staggering investments can be a good strategy for maintaining respectable returns and liquidity for those looking to enjoy higher liquidity. As per your liquidity requirements, you can stagger your investments, which can easily be done with the Multi-deposit facility. With the Systematic Deposit Scheme, you can also opt to invest every month, reaping the benefits of monthly returns. You can start saving only Rs. 5000 per month with this savings plan. You can make between 6 and 48 monthly deposits, each chosen for periods of between 12 and 60 months. You get proceeds each month until the first FD matures.
You should reinvest your profits rather than park them in a savings account to further increase your FD returns, through the power of compound interest, if you do not need liquidity immediately. The Auto-renewal facility is provided by companies to do this. It allows you to remain invested without manual interference for a longer tenor. What’s more, it allows you to pick up renewal incentives on the way, currently a 0.10 percent interest rate boost.