7 Innovative Fixed Deposit Strategies to Earn Higher Returns

Fixed Deposit


Fixed deposits have been the choice of investment owing to all the right reasons. They offer a guaranteed return on investment without taking almost any risk. So, whether there is inflation or deflation in the economy, you will continue to earn a good return on your deposit.

Furthermore, with the fixed deposit app, you can now track your investment and renew it whenever you want, without any hassle. But, if you are not happy with how things are and looking for ways to maximise the return, you need to know some tricks.

7 Innovative Tricks to Earn More Return From FDs

Here are some tricks to get the best possible return from FDs –

1.      Opt for the Cumulative Option

The first option here is to opt for the cumulative FD option. Since the return you earn under this deposit gets reinvested, you can benefit from the power of compounding. Therefore, at the time of maturity, your total investment increases substantially, and so is your final payout.

2.      Utilise the Ladder Scheme

To earn higher returns from FDs, you can take the assistance of the ladder investment strategy. What this means is you break your total corpus into small parts and invest them at various interest rates from different terms. So, in case of a financial emergency, you do need to break the FD of a larger amount to meet it and suffer substantial financial loss. Instead, you use an FD with a lower amount invested for the short term.

3.      Invest in the Name of Any Member of Your Family Who is Above 60

When you invest in the name of any family member who is above 60, you can earn an extra 0.50% interest on the deposit. So, you can easily increase your return by this process.

4.      Submit Form 15G and 15H

Submitting these two forms stops the bank from deducting the TDS from your FD earning. As a result, you get the total amount without any deduction and then pay the income tax later if you qualify for it.

5.      Check the FD Rating

If you see fixed deposits with the ‘AAA’ rating from the leading credit rating agencies, they offer higher returns. So, investing in these deposits is a good idea to secure a better return.

6.      Avoid Premature Withdrawal of FDs

To ensure the best return on an FD, you must let it complete its term. So, refrain from breaking the deposit before the maturity date.

7.      Time your Investment Carefully

Last but not least, timing is crucial for every investment, and it is also valid for FDs. So, if you plan to invest in a fixed deposit and time it correctly, you can generate higher returns on it. For instance, the FD rates are currently high across all financial institutions, so you can use this opportunity to your advantage.

To sum up, these are some of the ways you can use to earn the best possible return on your FD investment.

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