Better ways to select right fixed deposit

Looking for investment options can be daunting, especially when considering fixed deposits (FDs). While a few may prefer the stability of fixed deposits for their assured but modest returns, others may be excited by the potential for higher gains by investing in equities like stocks or mutual funds.

However, even after opting for a fixed deposit, the task isn't over; it is important to choose the right one amidst multiple options available.

Here, let's explore the factors to consider before investing in fixed deposits.

Find out about the bank’s credibility

While fixed deposits (FDs) are known for their low risk, it's essential to consider the reputation and credibility of the bank where you are planning to invest. Consider the bank’s CRISIL or ICRA ratings to understand its reliability. By examining these ratings, you can make an informed decision about the safety and stability of your investment.

Choose a Suitable Tenure

Fixed deposit durations greatly vary from as short as 7 days to as long as 10 years. This gives you the freedom to pick a timeframe that suits your saving objectives and preferences. Notably, several leading banks now provide the highest interest rates for fixed deposits with durations of 2-3 years. This is important to consider if your decision on the duration depends on the amount of interest you'll receive.

Check for Interest Pay-Out Options

If you require consistent financial assistance through your fixed deposit, be sure to select a product that offers a periodic interest payment option. Depending on your requirements and preferences, you can opt for monthly, quarterly, semi-annual, or annual payouts.

Look Out for Ease of Booking

There's no need for you to endure a lengthy and out-dated application process that involves complicated paperwork and verification, especially when you can easily book online. Look for bookings from the comfort of your home. This process becomes easier if you hold a savings account with the bank where you intend to invest.

Select the Best Interest Rate

Selecting an investment is inherently linked to the returns it generates. Therefore, it's logical to compare fixed deposit interest rates across different banks and choose the one with the most appealing rate. Higher interest rates lead to greater returns. By conducting this comparison, you can optimise your investment to gain maximum returns.