Fixed deposits are one of the preferred choices for saving money and making profits from investments. FDs are more popular among the investors. They get higher interest rates from the FDs and the risk is minimal as well. However, the rate of the interests varies from bank to bank, but one can make money from this investment by a good selection of schemes.
Different banks or private institutions offer different FD schemes with a variety of interest rates. If you want to invest your money in the best fixed deposit then you will have to do some primary research before heading for one.
With a fixed deposit, you can deposit lump sum money for a fixed period ranging from a couple of weeks to a couple of years. You can earn a pre-determined rate of interests from that deposit. FDs are offered by both the private and government organizations. But it is always suggested to take the plans from the government organizations to avoid any risk that you might experience with private institutions. Government institutions or banks offer surefire returns to the investors at the time of maturity.
If you are planning for FD schemes and a bit confused to choose the right scheme then go through the following tips to get to best fix deposit scheme for you. First of all, always consider to invest your money in a bank rather than choosing any private institution.
They might offer you more interest, but this is a bit risky and you might face complications at the time of maturity. Consider three following points to secure your money and to earn more from FDs.
1. Do your own research
Before choosing any particular FD scheme, you need to inquire about all the important things such as the interest rates and the tenure period. Different banks have different schemes and interest rates. Hence, you need to contact with more than one bank to know about the availability of the schemes, tenures, and returns. Make a comparison of all those and get the one that you find the best for you.
Remember that interest amounts on Fixed Deposits are calculated in half-yearly, yearly or at the time of the maturity. Therefore, you will have to make a proper calculation of schemes of different banks to know which one is paying the highest interest rate.
2. Plan for split accounts
If your interest rate is more than a certain amount, you might need to pay some TDS (tax deductible as source) charges. The tax accountability of TDS will be determined at the branch level. To avoid TDS charges, you should split your fixed deposits. Instead of opening one FD account with huge money, you should open FDs with different branches by dividing your investment. By doing so, you can avoid the TDS charges and get the same profits. You can also open FDs in different banks. The result will be same.
Another advantage of split account is that, in case you need your money urgently, you can break any fixed deposit without affecting others. If you have one account only then you will be forced to break the account and withdraw the amount. In that situation, you cannot get the pre-determined interest.
3. Go for Reinvestment
You will get two options in an FD, withdraw the interest at the time of maturity or reinvest it to earn more. If you go for the first option, your saving account will be credited by the interest rates. But the interest will be higher if you choose the reinvestment option. You can reinvest your interest amount and can get interest on that investment. If you choose the withdraw option, the interest only will be credited to your account every year, but if you will go for reinvestment of your interest then you can make more money.
You can make money from your FDs by choosing the right institution, right scheme, and the right strategy. You should do a proper research about the FD schemes, interest rates, and other facilities before selecting any plan.
If required, you can take the help of any experts to know the details of plans and interest. There might be some hidden terms and condition. Go through all these and then choose the right investment option to secure your future.