Effective ways to plan a fixed deposit account
Fixed deposits are investment instruments offered by banks and non-banking financial companies, where you can deposit money for a higher rate of interest than savings accounts. You can deposit a lump sum of money in fixed deposit for a specific period, which varies for every financier.
Once the money is invested with a reliable financier, it starts earning an interest based on the duration of the deposit.
Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw after paying a penalty.
Fixed deposits enable investors to earn higher interest rates on their surplus funds.
You can fund a fixed deposit account only once, but to add more money, you need to create another account.
There are several advantages of fixed deposit investments. They are the safest investment instruments, and offer greater stability.
Returns on fixed deposit are assured, and there is no risk of loss of principal.
You can opt for periodic interest payouts, to help you manage your monthly expenses.
There is no effect of market fluctuations on your fixed deposit, which ensures greater safety of your investment capital.
You can benefit from higher interest rates offered by company fixed deposit.
According to www.bajajfinserv.in, though liquidity in fixed deposit is lesser, you can look for higher rates of interests, which are higher in case of company fixed deposit.
Fixed deposits are an investment option that can help you gain from stable returns. Investing in multiple FDs can often help you widen the scope of making money. However, dividing your investment into various FDs is not as simple as it sounds, according to www.allperfectstories.com.
It requires you to thoroughly monitor and manage your accounts so as to gain the highest yield. One good way to manage your FD in advance is to use the FD calculator. This can help you view the FD interest rate. There are various other ways in which you can manage your fixed deposits.
Ladder your FDs
The most common way of managing multiple FDs is to ladder them. This involves taking a lump sum and dividing it between numerous FDs for varied tenors. The logic here is that a single sum of money divided between various FDs yields much more than investing it in a single account.
So, in order to earn more on your fixed deposits. It is good to split your main principal into a mixed bag of cumulative and non-cumulative FDs. This will not only help you gain from varying interest returns and compounding frequencies but will also give you access to matured returns at frequent intervals.
Keep a strict record
When you have multiple FDs, it can often become difficult for you to keep track of all your accounts simultaneously. In such cases, you need to ensure that you monitor your accounts carefully. In order to cut the hassle of manual tracking, set a calendar reminder on your smartphone or via apps so that you know when to check the FD statements for interest gains and tax deductions.
Go for an issuer with online management
Online account management is key to handing your investment stress-free. This is a unique facility that helps you view the details of your fixed deposit online. All you have to do is log in with your allotted user ID and password.
You can then check all your FD-related details such as the FD interest slips, view the statement, and the account balance. All this happens in just a click without having to visit the branch. Also, you have more flexibility as you can access your account from anywhere and at any time.
Keep track of renewal deadlines
Depending on the day you started your FD and the tenor you chose, your FD will have a maturity date. Once it is mature, you will need to claim the amount or renew it. Most issuers have a fixed cut-off time for renewal. Setting your fixed deposit on auto-renewal will help you stay tension-free as then you do not have to constantly remember your maturity and renewal date. Keeping track of renewal deadlines and renewing FDs on time lets you gain from additional interest gains that issuers offer as a reward to existing customers.
These strategies can make the task of managing FDs simple. However, you need to first ensure that you invest in a rewarding fixed deposit. This enables you to receive high returns of up to 8.75 per cent and enjoy more stability with high safety rating.
Before you invest, ensure that you check your maturity amount using the FD calculator. Once you do this, you can open Fixed Deposit account online and use your earnings for a range of purposes like financing holidays, repaying loans, paying bills and funding your child’s education.