Fixed Deposits are a good way to invest your savings. Since the principal is recoverable, most investors consider it as a secure mode of investment. They can also help you to save on taxes. They provide a higher rate of return compared to savings accounts. You can opt for a fixed deposit at almost every bank and housing finance companies these days.
Depending on your needs, you can apply for yearly, quarterly, or monthly returns. It can help you with a stable income source. While opting for a fixed deposit with monthly returns, it is wise to invest a huge sum of money.
Things to Consider While Applying For Fixed Deposits With Monthly Returns
• Interest Rates
It is essential to know the rates on fixed deposit schemes. Once the principal amount and interest are fixed, they remain the same until maturity.
fd interest rates also vary depending on the tenure of the deposit. All banks and housing finance companies offer higher interest rates for senior citizens.
• Choice of Tenure
Fixed deposits can have a maturity tenure from a week to a decade. To manage interest risk, you can divide the money between the short term and long term deposits. You can also check for special offers on Fixed Deposits, based on tenure.
• Premature Withdrawal
If you are closing a fixed deposit before the maturity date, the amount accrued is calculated for the time the principal was present in the bank or HFC at the fixed interest rate. However, you will have to face a penalty for premature withdrawal.
• Mode of Investment
You may visit your bank/HFC or use online banking to invest in FDs. Some banks/HFCs go a step further and help you invest through ATMs and mobile banking channels.
Conclusion
It is very important to look at the terms and conditions of Fixed Deposits offered by the banks, especially interest rates and security.
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