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4 Strategies for Maximising FD Returns that Actually Work
Posted on Monday, October 30th, 2023 | By IndusInd Bank
Choosing a cumulative FD plan, laddering your FDs and avoiding premature withdrawals are some of the effective ways to optimise your FD returns and secure your financial future.
Fixed Deposits (FDs) have enjoyed enduring popularity due to their dependability and consistency. They provide you with a safe place to park your money and ensure its steady growth over time. FDs help you maintain financial discipline by locking your funds for a predetermined period. This can assist you in achieving your financial goals, whether you are saving for a car loan down payment or planning major home repairs. But while an FD comes with the promise of returns, you need to do more than merely lock away your money if you wish to truly maximise your FD returns.
Here are four effective strategies to help you boost your FD returns.
1. Choose a Cumulative FD Plan
In a cumulative FD plan, the interest is compounded either quarterly or annually and reinvested in your principal amount . You will receive the interest amount with the principal sum when the deposit matures. If you do not really need regular interest payouts, choose the interest to be paid at maturity because it will allow your money to grow over time.
2. Ladder your FDs
Another smart move is to ladder your FDs. This essentially entails spreading your investments across several FD accounts with varying maturity dates. Doing this makes sure you can regularly access a portion of your funds and benefit from some of the highest FD interest rates offered by medium tenures. As each FD matures, you can choose to either reinvest the proceeds or use the money for other purposes.
3. Do Not Break Your FD Before Maturity
Breaking the FD prematurely may result in penalties or reduced interest rates, which will affect your overall investment returns. If you let your FD run its full course and reach maturity, your money can grow steadily at the agreed-upon interest rate over the specified period. So, keeping your FD until it matures is a smart financial move to optimise your savings and fully enjoy its benefits.
4. Think About the Investment Tenure Carefully
Generally speaking, banks provide higher interest rates for medium-term and long-term deposits. However, while longer tenures exceeding 5 years may seem attractive, you need to keep in mind that interest rates commonly do not tend to keep pace with the rate of inflation, causing the value of your money to erode over time. Therefore, you could consider opting for FDs with shorter tenures and choose to re-invest when rates go up.
Book an FD With IndusInd Bank for Guaranteed Returns
Booking an FD with IndusInd Bank is a smart choice if you are in pursuit of lucrative, assured returns for your investments. It offers an array of compelling features and benefits that make it a reliable option for every kind of investor.
- Streamlined 100% paperless online booking in three simple steps
- Instant Video-KYC facility for FD booking
- A relatively low minimum deposit requirement of INR 10,000
- Flexible tenure options ranging from seven days to ten years
- Competitive interest rates (preferential rates for senior citizens)
- Auto-renewal option upon maturity
- Flexible interest pay-out options are available, including monthly, quarterly, half-yearly, yearly or at maturity
- A 5-year FD option for tax-saving benefits
With so many attractive features, an IndusInd Bank FD is indeed a dependable avenue for growing your savings. Book today and get guaranteed returns upon maturity!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
