How to Get Maximum Returns from Your Bank Fixed Deposits

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How to Get Maximum Returns from Your Bank Fixed Deposits

Indians have always considered fixed deposits as one of the safest investing options. FDs offer a lower return than other investment options, but they come with absolutely no risk. While your money is safe at the bank, you can continue to earn interest.

How do you ensure that your returns are maximised in such a situation? We’ll look at some of the tactics that can help you get a better return on your FDs in this article.

Compare Bank FD’s

While almost all major banks’ FD return rates have declined in recent months, several smaller banks continue to offer better rates. So, before deciding on an FD scheme, please conduct a thorough market analysis of all accessible possibilities.

Compare bank FDs to available corporate FDs and choose the one that best suits your needs. Each plan has its own risk, duration, and interest rate, and as an investor, your goal should be to choose the scheme that gives you the best return with the least amount of risk.

Ratings from organisations like as CRISIL can assist you benefit from understanding the benefits and disadvantages of certain schemes.

Short Term Investment Schemes

Short-term investing alternatives give you the freedom to transfer your money around as needed. The current FD return is at an all-time low, and putting your money in a long-term scheme may prevent you from investing in a better scheme in the near future.

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Diversify your Portfolio

Investors with a diversified portfolio have the ability to limit their risk during difficult times. While FDs are generally thought to be a risk-free investment, there is still some risk involved. Rather of taking out a huge FD and investing all of your money into one plan, you may split it up into smaller ones to make your investment safer.

You’ll be able to set alternative return rates, as well as risk restrictions, as a result of this.

Reinvest your Interest Amount

Reinvest the interest from your FDs to get the compounding effect on your money. When interest is re-invested, it increases your principal, resulting in a higher return on the next cycle.

Floating Rate of Fixed Deposit

The flexibility of changing interest rates is provided by variable rate FDs. The interest rate is not fixed in this scheme and fluctuates with a reference rate that is updated on a regular basis. Floating FDs allow you to take advantage of interest rate fluctuations without having to shut and re-book your current FDs.

The rates are set based on the movement of the Bank’s Treasury Bill rates, which are auctioned every two weeks with a yearly mark-up.

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