FD: The interest rates of FD are increasing once again but for investment, it is necessary to make a proper strategy and invest money so that maximum returns can be achieved.
FD: The interest earned on Fixed Deposits (FDs) has come down for the last few years. The repo rate is at a low level at a historical level, due to which the return on investment in FD is low, so investors started looking for other options. However, now financial institutions have recently increased the interest rate of FD. Some national banks have also increased the FD rate. Due to this, now the trend of investors is once again moving towards this traditional investment option. However, for investing in FD, it is necessary to strategize properly and invest money so that maximum returns can be achieved.
Invest in short or medium term FDs instead of long term
According to BankBazaar, when there is a possibility of increasing FD rates, then instead of getting FD for a long time, one should invest money for short term or medium term because when the rates increase then it is not beneficial in case of investing money in long term. Can pick up Interest rates do not rise immediately but gradually increase. FD interest rates are increasing now, so investors should invest money in fixed deposits for short or medium term instead of long term.
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You can invest money in floating rate FD
Some banks are offering their customers the option of FD on floating rate. Floating rate FD means that the interest rate in this is not fixed but fluctuates. Right now the interest on these is not very attractive but when the rate increases then you can get higher returns on floating rate FDs. Some investors are constantly switching to FDs with higher rates than the old short term FDs, but this exercise can be avoided by investing in floating rate FDs.
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Invest money in both bank and company FD
When interest rates increase, not only banks but companies also increase their FD rates. In such a situation, instead of investing your money only in bank FDs, you can diversify your portfolio by investing in FDs of companies as well. Through this strategy, maximum return on capital investment can be achieved. Generally, the company’s FD gets interest at a higher rate, but before investing, the necessary research should be done. In the table below, information is being given about the rate of interest on FDs of banks and companies, which has been compiled by BankBazaar. In this, the interest rate is the data given on the website of the concerned bank and company as on 8 February 2022 and the maximum interest rate on FDs with the shortest tenure is the details. These rates are for investments less than Rs 1 crore.
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FD laddering option
FD laddering is a great option for investing in fixed deposits. In this, we do not invest the entire capital in FD for a single period, but invest it little by little in many FDs. For example, if you have to make an FD of 10 lakh rupees, then instead of putting this whole money in an FD for 1 year or 5 years, divide it into some parts and then one part for one year, the other part for two years and The third part can be invested in FDs of different tenors for 5 years or similarly. On maturity of the short tenure FD, you can meet your requirement with it or you can invest it in another FD. In this it is also not necessary that FD should be done in only one bank or company, but FD can be done in many banks and companies. By making FD in different banks, you will also get insurance benefit of Rs 5-5 lakh from each bank.
(This article is for information only. Before investing, please consult your advisor.)
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