In the current fast-paced and uncertain financial landscape, individuals are constantly seeking to invest in reliable instruments that offer long-term stability, security, and attractive returns. One such investment instrument is a fixed deposit, which has gained popularity in recent years as the fd interest rates are quite lucrative.
This scheme has undoubtedly provided an excellent opportunity for potential investors. It helps them invest a lump sum of money for a predetermined period, during which the institution holds the funds.
What is a fixed deposit?
Also known as a term deposit, a fixed deposit is a financial investment instrument offered by banks as well as financial institutions. It is a type of savings account where a potential investor deposits a specific amount of money for a fixed tenure at a decided rate of interest. The principal here is held by the institution for a specified period, and the interest accrues on it.
The rate of interest offered here is generally higher than what is provided by a savings account, and it is fixed for the overall tenure. Moreover, the amount invested cannot be withdrawn before the term ends. So, if, by any chance, the investor needs to withdraw the amount due to an emergency, they may incur penalties.
Before investing, keep in mind to calculate fd interest first.
What are the 5 tips to consider before investing in High Interest Fixed Deposit?
- Research and Compare Rate of Interest
Before investing your hard-earned money, it is essential to thoroughly research and compare the interest rates offered by different various financial institutions for high interest fixed deposits. So, look for institutions that provide competitive rates in order to maximize your returns.
- Understand T&C
Carefully understanding the Terms and Conditions associated with the high-interest fixed deposit is essential for everyone. In addition, factors such as the minimum deposit amount, lock-in period, premature withdrawal penalties, and renewal options are to be considered and taken care of.
- Assess the institution’s credibility
Evaluating the credibility of the financial institution offering the high-interest fd is very important. Look for well-established institutions such as Bajaj Finserv with a strong track record for many years. I’ve used their FD calculator and invested in FD on their platform only and the overall experience was quite smooth.
- Consider Deposit Insurance
First, check if the financial institution or bank offering the high-interest fixed deposit is covered by a deposit insurance scheme. This provides an added layer of protection to your investment, assuring repayment of a certain amount in the event of the institution’s failure.
- Evaluate Financial Strength
Assess the financial strength of the financial institution in which you plan to invest your money. Factors such as their credit ratings, financial performance, and stability over the years.
How to invest in a fixed deposit?
Investing in fixed deposits is as easy as ordering clothes/groceries/food from your smartphone. You need an internet connection and the right app. Around three months ago, when I was planning to invest in the same, one of my colleagues told me about the Bajaj Finserv application.
- Download the app from Play Store/App Store
- Sign up by entering your mobile number
- On the home page, you’ll see the Investment Bazaar section
- Tap on Fixed Deposit
- Proceed further as per your suitability/requirements
How to calculate interest rate on fd?
- On the home page, click on three bars on the top right.
- Choose the ‘Try our Calculators’ option.
- Go to ‘Deposits Calculators’
- Choose ‘Fixed Deposit Interest Calculator.
- Fill in the required details and experiment.