Fixed deposits come as one of the most secured and popular investment tools available in the country. They can provide you with excellent returns, given you understand the product thoroughly and make knowledgeable decisions. With a good understanding of FD products, you can maximise your investment benefits.
A large number of banks and financial institutions enable their investors with the option of investing money in their FD instruments and in this article, we will help you in identifying the FD products that best meet your requirements.
FD securities provided by banks and financial institutions normally vary from seven days to ten years. A significant chunk of banks also offer FDs for extended tenures (up to 20 years). You should invest in an FD plan whose tenure perfectly meets your financial goals. You can pick the suitable FD tenure as per your short and long-term goal objectives.
You should also favour FDs that provide you with the one of the highest rate of interests to accomplish your financial goal objectives.
Bank deposits of up to Rs 5 lakh are protected via the Deposit Insurance and Credit Guarantee Corporation (DICGC) which is an RBI subsidiary. In order to effectively cancel the default risk, you may evade exposure of more than Rs5 lakh in a single bank when you plan to invest in an FD.
The more reliable way would be to break your investment into numerous FDs in different banks. You must also ensure that each of your deposits does not exceed Rs 5 lakh.
When the interest rates of FD are expected to surge, you can opt for multiple FDs of different maturities to build FD laddering and profit from comparing the FD interest rate in the longer duration
Another advantage of running multiple fixed deposits is that you can cash one or two FDs to address any emergency demand.