Five Tips To Earn Amazing Returns From Fixed Deposits

We all wish to save something for our future so that we could fulfill all our needs and desires. Before investing, we always try to predict the returns in advance so that we can plan our finances accordingly.
A fixed deposit is a type of investment that allows you to predict your returns in advance. The interest rate, principal amount, and investment tenor are all pre-determined. Your returns are guaranteed, and you do not have to worry about changing market conditions as in the case of investments like stocks and mutual funds. Moreover, FDs offer high-interest rates as compared to other fixed-investment instruments. 
However, to reap maximum benefits from fixed deposits, you have to invest smartly by understanding the features and benefits provided by different banks and NBFCs. Here are five ingenious tips that could improve your chances of earning amazing returns on your fixed deposit investments:

1.   Select an FD smartly

Different banks and NBFCs offer different interest rates on fixed deposits. Furthermore, these interest rates also vary with the tenor. For example, a bank which offers 8% interest rate on 2 years FD might offer 9% interest if you choose an investment tenor of 3 years.
Always go for the fixed deposits that provide higher interest rates but at the same time also ensure that you do not face any liquidity issues due to longer lock-in periods. 
Withdrawing fixed deposits before maturity is not advisable as your bank or financier might charge you with a penalty that rips off a small percentage of your returns. We recommend you to understand your financial requirements and decide the tenor of your FD accordingly. 
You can make use of the online FD calculator to calculate the expected returns and interest rates for any particular fixed deposit scheme.

2.   Ladder your investments

Fixed deposits come with fixed, pre-determined interest rates. However, the interest rates keep changing as per economic activity and inflation. Therefore, to even out the interest rates you can use a technique known as laddering of investments. 
In this method, you can invest in more than one fixed deposit with different tenors across different time periods. As a result, some fixed deposits will have higher interest rates than the others. Also, FDs with longer tenors will have high-interest rates than the ones with a shorter tenor. When one of the FD matures, you can re-invest it for the same or longer time period. This will solve your liquidity crunch and will also provide high returns in the future. 
Bajaj Finance FD schemes let you start investing with a minimum investment amount of INR 25,000. Hence it’s easy to spread out your investments.

3.   Choose cumulative fixed deposits

A cumulative fixed deposit pays the accumulated interest at the end of the tenor. It enhances your returns as your principal amount grows with tenure and you get the benefit of compounded interest. Cumulative fixed deposits with longer tenors generate more interest and ensure high returns.

4.   Go for company FDs

Company fixed deposits offer high interest rates as compared to bank fixed deposits. For instance, Bajaj Finance Fixed Deposit offers up to 8.75% interest rate, which can go up to 9.1% for senior citizens. You can also avail the advantage of flexible tenor ranging from 36 months to 60 months. Choosing short tenors will help you protect your investments against inflation. Apart from that, these are low-risk investments as they are not subject to market risks.

5.   Re-invest your profit 

As the FD matures, you earn some profit in the form of the accumulated interest. You will certainly be able to collect amazing returns in the future if you re-invest that profit in another FD scheme. Similarly, you can invest in multiple FDs, collect their interests and invest in a new FD. As the years will pass, you will see that you have grown your earnings significantly as compared to your initial investment.  
Fixed deposits have been a preferred choice of investors across all age groups to help them secure their future financially. FDs are gaining more attention recently as banks and financial institutions have started offering a vast range of choices when it comes to interest rates, amount and tenor. 

Investing in Bajaj Finance Fixed Depositcan be a smart choice as it is accredited by highly reputed third party institutions such as ICRA and CRISIL. This means that your investments are in safe hands. Moreover, you can also avail a loan on your FD if you face some financial crisis in the future. Investing is easy with Experia- your online fixed deposit account. 
Five Tips To Earn Amazing Returns From Fixed Deposits Five Tips To Earn Amazing Returns From Fixed Deposits Reviewed by Durgesh Thakur on February 20, 2019 Rating: 5

No comments:

Powered by Blogger.