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A Guide On What Are The Best Ways To Choose A Fixed Deposit?

Fixed Deposits can support your short and long-term financial aspirations if you invest in the right Fixed Deposit Scheme. Before investing, you should check the available interest on the deposit and the tenure for your investment. You must gather all information regarding premature withdrawal and the applicable conditions. You can opt for cumulative or non-cumulative payouts. The former is suitable for those whose eyes are on the financial endowment. The second scheme will support those who need regular income on a date. Please check the possibilities to avail of loans and credit lines against your FD.

Featuring the minimum investment risk and fetching reasonable return, the Fixed Deposit scheme is the right investment tool for investors who want to escape higher investment risks. For years, it has been India’s most popular savings scheme and retains its relevance. Howeveryou must pick the right FD scheme to optimise your return to support your short- and long-term financial goals. Here is your guide in that regard. 

Consider the rate of interest. 

The foremost consideration is to check the rate of interest on your deposit. You will find the prevailing FD interest rates in 2022 on the website of the proposed banks or Non-Banking Finance companies you proposed to deal with. As for the possible interest rates, it majorly depends on your deposit’s lock-in period and the deposit value. 

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When you make a fixed deposit with any bank or NBFC in India, the receivable interest rate is determined per the lending rate imposed by the Reserve Bank of India. You will keep earning interest on the deposit at the prevailing rate as determined from time to time. However, you will wind some schemes that entitle Elderly Citizens to additional interest over the usual payout. Should you qualify for such schemes, you should go for them. Alternatively, you can fix the fund in the name of such family members to get additional interest. 

Premature withdrawal Condition 

You might need exigent cash at some time or the other. Therefore, you might have to withdraw your deposit at a premature stage. So, before investing the fund, please check if such withdrawals are permissible and, if so, the applicable terms and conditions. Usually, you can withdraw the fund within 6 months without paying the penalty. Premature withdrawal beyond 6 months is likely to attract a penalty. Before investing your corpus, you should know the terms and conditions for such withdrawal.   

Cumulative or Non-Cumulative payouts 

FD Plans usually feature cumulative and non-cumulative payouts. In the first case, you will not be able to draw interest midway between the tenure. The total fund, including the deposited principal and the cumulative interest earned, becomes accrued on completion of the lock-in term. On the other hand, non-cumulative schemes will not compound the interest. Rather, you can withdraw it at fixed intervals throughout the investment term. 

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It would be best if you decided on the payout depending on your needs and financial plans. If you don’t need the FGD to produce regular income on a date, it is better to opt for the cumulative payout, as it will make the fund grow, fetching a consolidated amount on completing the tenure.  

Lock-in Tenure 

Before taking a Fixed Deposit scheme, it is important to consider the lock-in period for your deposit. Usually, you can fix the fund for as little as a few days to the maximum span of 10 years at once. You should always go for the longest tenure if you want more interest. It would help if you decided on the tenure in a manner that supports your financial plans. 

Check the Availability of loans against the FD. 

Another way to meet your cash needs without liquidating your FD is to avail yourself of cash loans. Before you put your money in a fixed deposit scheme, please check the loan availability by pledging the FD certificate. Lenders lend out loans on simple terms and conditions of pledging such assets as collateral to the loan. Alternatively, you can even avail of Credit Cards or Credit lines by pledging your FD. You need to check all the available benefits in this regard before you invest your fund. 

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Bajaj Finserv offers east cash loans against FD at attractive interest rates. You can expect the fastest disbursal and simple terms and conditions for such loans with this leading NBFC. 

Investing in the right Fixed Deposit Scheme will enable you to achieve your financial objectives within a fair time and hassle-free manner. 

The second scheme will support those who need regular income on a date. Please check the possibilities to avail of loans and credit lines against your FD.

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