One of India’s most common investment tools is fixed deposits. The security of funds, simple saving, assured profits, and high liquidity factors make it an excellent choice, in particular for investors at risk. However, this year’s repo rate fell by 135 basis points, resulting in a modest decline of the FD interest rates until now, while deposit rates could not be prevented from falling short. At present, several investors have a problem with whether to continue investment in FDs or switch to some other alternative method.
Investments in fixed deposits offer a way of securing the amount of the vital investment fund. Without the availability of term deposits, no financial portfolio can be completed.
You will have a liquidity clause if you have fixed deposits in your account. You can also stop removing the money from equities if the stocks are down and allow them time to rise.
Maximizing your HDFC Fixed deposit returns is as simple as investing in them.
Use these concepts to optimize returns on HDFC Fixed deposit
Continue the deposits until the end of the term
Many citizens chose longer terms because fixed deposit returns for more extended periods are better, but eventually, their HDFC fixed deposits are removed prematurely. This adds to losses because you get interest up until the day you have invested in the premature withdrawal. There is also an early withdrawal fee.
You can instead take a loan for your HDFC Fixed Deposit if you need funds. The cost of the loan is also meagre. You can also build a Fixed Deposit Sweep-in Account if you need funds regularly.
Use the ladder plan for Fixed Deposit Investment
A Ladder Investment Plan involves opening fixed deposits with varying maturity dates. You can then guarantee that you have enough liquidity. By holding some of these deposits for the longer term, you can also take advantage of higher regular and senior citizen FD rates.
Pick cumulative schemes for fixed deposit
Interest is not charged but reinvested in cumulative term deposits. You have a compounding impact on your HDFC fixed deposit deposits by reinvesting received interest. This is an excellent way to optimize returns on your deposit assets if you do not need a source of earnings.
The interest is paid out regularly by non-cumulative fixed deposits. They may not then have a compounding impact. However, non-cumulative permanent deposits are a decent way to gain regular money.
Prefer investing in highly rated corporate fixed deposits
Corporate fixed deposits are also an alternative for investing in term deposits. In contrast with bank deposits, many corporate deposits have higher regular and senior citizen FD rates.
Make sure always you choose a reputable AAA credit rated company for fixed deposit. Take a look at their interest rates for ten or so years and research them in more detail.
Submit 15H or 15G Form
If your HDFC Fixed Deposits annual net interest is greater than ₹ 40,000, but your yearly earnings are lower than ₹ five lakhs, the Form could be 15G/15H. You will avoid tax deduction on your fixed deposits by applying the 15G or 15H Form.
Store in your parent’s name your fixed deposit savings
Most of the banks provide higher Senior citizen FD rates than regular FDs. HDFC Interest rates for deposits set for senior citizens are about 0.5% higher. You will get higher interest rates by adding your deposits in the name of your parent.
Open FD accounts online
For customers participating in fixed deposit schemes online, some banks offer higher prices for fixed deposits. Ask the bank or business to provide you with a better rate of interest if you want to invest online in fixed deposits.
Know about your fixed deposit details
Your FD rate depends on the tenor and the payout option you choose. The FD rates are higher with many issuers as your tenor reaches three years. You may, however, especially if you are an older person, not want liquidity deprived for too long. Therefore you can opt for periodic payouts, but note the general rule: cumulative FDs will perform better, and net returns will decline as the frequency of payouts rises.
Select the apt issuer to achieve safe returns
After a series of RBI repo rate cuts, it is crucial to pick your issuer in direct relation to the provided interest rate. While bank FDs are expected, a corporate deposit can be viewed as offering a more competitive interest rate. Yet and behind the crises in the market, if you want to earn returns predictably, it is essential to obtain strong credentials at healthy interest rates.
Conclusion: Investing in FDs is an apt financial instrument for people who have a low-risk appetite. Considering the saving tendency of Indians, they are right to think so. Use the tips mentioned above to maximize your returns on the FD investments.