Over the years, the rate of interest offered on fixed deposits has significantly dropped. This can be regarded to several factors such as the introduction of Long Term Repo Operation (LTRO) by the RBI and the overall economic slowdown. However, Fixed deposits continue to be one of the simplest and safest investment options available today. The returns are assured and the fixed lock-in inculcates a good sense of investment responsibility among investors.
If you are planning to make a fixed deposit investment, now is a good time. There are several strategies that you can use to bring out the best of your fixed deposit investment and use it for your financial growth:
Lock in your FDs now – There is a constant revision in the interest rates on Fixed deposits. It is best to make your investment ahead of the impending changes. Experts’ advice that there can be further cut in the rates through the mid-year. At present, the rates offered are stable and this makes it a good time to add fixed deposits to your investment portfolio. It will bring you a greater chance of receiving better returns on your investment. If you have been procrastinating until now, it is good time to get going.
Make the right choice – While you may think that the fixed deposits investment option on offer are rather standard, this is not the case. You must make a very diligent choice when putting your money into a fixed deposit. Opt for a bank that not only offers attractive interest rates but also attractive features. Carefully evaluate the reputation of the bank and look for value-added features. This could include good customer service, online facilities, easy withdrawal and more. If you are a senior citizen, look for a bank that offers you higher interest rates.
Tax saving fixed deposits – Contrary to popular belief, you can enjoy tax saving benefits through your fixed deposit. Fixed-deposits that are locked-in for a minimum period of 5 years come with tax saving benefits under the Section 80C. However, you must note that the amount cannot be withdrawn nor pledged before the completion of the tenure.
Now that you know the ways to make the best of your fixed deposits despite the declining interest rates, you can use the fixed deposit calculator. It will help you understand how much money you must invest in order to meet your financial plans.