The Best FD Scheme is also one of the most preferred and popular deposit schemes in India. Under this, you can choose any tenure between one to ten years in your favorite bank and deposit a lump sum according to your convenience. In recent times, interest rates ranging from 5.50 per cent to 6.50 per cent are being offered by banks for depositing funds under the Fixed Deposit Scheme (FD Scheme) during this period. Actually, in FD scheme, along with a fixed return, the amount deposited is also considered to be safe. Due to this, its popularity has not diminished even today.
In the Fixed Deposit Scheme, the investor gets the option to choose the period of investment ranging from 7 days to 10 years. However, premature withdrawal of the amount deposited under the bank FD scheme is usually not allowed, but the facility to withdraw prematurely is given by paying a penalty. Also, the Re-Investing Fund of Extra Fund is generally at a lower rate of interest. Keeping this in mind, it is important to know about some factories before investing in the current FD scheme. Know in detail, it is important to take care of the following things before FD.
Interest: Under the FD scheme by banks, interest rates are offered on the basis of tenure. Difference in interest rates can be seen in different banks and it depends on the bank. It also depends on the age of the depositor. Generally, the interest rates paid to senior citizens in most banks are 0.5 percent higher than the regular rates. Usually, you get a higher interest on a lump sum deposit. The FD’s interest rate remains the same for the entire duration of the investment.
Loans: Investors who invest in FD scheme also get loan facility. Which is one of the major advantages of this deposit scheme. In view of any financial need, a person can take a loan on FD amount up to ninety percent of his deposit. The term of the loan can be up to the maximum duration of the FD scheme, as the maximum tenure is limited to the maximum duration of the FD.
Credibility of the bank: Investor must check the credibility of the bank before making an FD. FD is safe under DICGC’s Depository Insurance Program and an amount of Rs 5 lakh is insured under it. Do check the credit rating of any bank by investing. Finance experts say that instead of investing all the money in one FD, the investor should invest in different banks to reduce their dependence.
Premature withdrawal: Before investing in a fixed deposit scheme, it is important for you to know that premature withdrawal means a penalty on premature withdrawal and this varies from bank to bank. The penalty is usually reduced from 0.5 per cent to one per cent of the interest rate applied by banks. However, it is also seen that some banks allow investors to break their FDs before penalty time. However, they are required to fulfill additional criteria. In view of this, experts say that while selecting a bank for a fixed deposit, one should look for such banks who impose less penalty on premature withdrawals.
