4 Tips To Earn More From Your Fixed Deposit
A Fixed Deposit (FD) investment offers secure savings and assured returns, making it the best investment to earn more interest. An FD provides a higher interest rate than a regular savings account. You can also use the flexible tenure feature of a fixed deposit to plan your financial goals. Investing in a corporate FD can help you earn more interest than opening an FD with a bank.
The fixed deposit plan has been one of the most popular investment options across India as it is simple to understand and easy to open. Individuals who are new to investing with a low-risk appetite can also benefit significantly from investing in an FD. An FD’s additional benefits can help you yield more returns. Read ahead to understand more on the same.
With a Shriram Fixed Deposit, you can earn interest up to 8.75% per annum, including 0.50% additional interest for senior citizens. Besides the high-interest rates, you can also avail of the extra 0.25% interest upon renewal of a matured Shriram Fixed Deposit.
4 Tips to Get Maximum Returns from a Fixed Deposit
Check Interest Rates
Before investing in a fixed deposit scheme, it is always best to research and check for the best interest rates. When checking the interest rate, you should also look at the tenure, which is essential in deciding which financial institutions you need to choose. You must remember that fixed deposit interest rates vary across different financial institutions and may differ according to the type of fixed deposit.
You can get a fixed deposit at a bank, Non-Banking Financial Companies (NBFCs), Post Office, or any other financial institution. Generally, the interest rates offered by a nationalised bank are lower than a company. While deciding, you also need to consider that corporate FDs have a ranking system that allows you to know which is the safest investment option.
Save on Tax and Earn Higher Returns
The interest earned on any fixed deposit is taxable. Typically, a TDS (Tax Deducted at Source) of 10% is charged on any fixed deposit with an interest rate of more than Rs. 10,000 per annum. If you fall below the taxable limit prescribed by the government, you can submit Form 15G or 15H to claim exemption. A great way to avoid getting TDS charged on your FD is to split it into smaller amounts and invest it separately. In this way, you will earn more interest and can also avoid TDS charges.
The smaller accounts can either be made in the names of your family members or split between different branches of your preferred financial institution. Another advantage of dividing your money into smaller accounts is that in the case of an emergency, you can break an FD while also continuing to earn on the other deposits.
Re-invest the Interest
You can use the interest gained on your investments to re-invest and earn more interest through a secure fixed deposit. Some banks and NBFCs also offer additional interest for those who choose to re-invest after their previous deposit has matured. You can either re-invest the principal amount with interest or use just the interest to start a new deposit. If the principal amount is not used after the fixed deposit maturity, it is always a good idea to re-invest to earn more returns.
Avoid Premature Withdrawal of Fixed Deposit
Breaking a fixed deposit is highly not recommended as it can incur a penalty that may affect your interest payout. A loan against an FD is another facility that can help you in emergencies. Your fixed deposit will act as collateral for your loan. You can also pre-pay the loan, and no penalty will be charged for such an action. You can also convert an FD into a sweep-in account. All you have to do is link an existing FD to your savings account. This will allow you to remove a part of the invested money and let you put more into the FD if you have surplus funds.
Conclusion
An FD has features and benefits that make it the most popular investment. It is the most secure investment option that can help you give flight to your dreams.
Invest in a Shriram Fixed Deposit now to get one of the best interest rates. With decades of trust in the market and over 2.12 million customers, Shriram provides secure FD accounts with assured interest. Now that you have all the information you need, you can begin your investment journey immediately.
Key Highlights:
- An FD offers higher interest rates and is one of the most secure savings schemes.
- You can get assured returns on your FD.
- An FD can be used to take a loan in times of financial emergency.
