When you invest at the right time, you can build wealth for a better life. To have a safe and stable financial future, it is essential to plan your investments wisely.
In May 2022, when I started my professional career, I always had at the back of my mind that I needed to invest accordingly to meet my goals in the coming years. However, when my parents guided me about the FD interest rate, which undoubtedly was quite lucrative, I went for it.
What is a fixed deposit?
Fixed Deposit or FD, also known as a Term Deposit, is one of the most sought-after investments in the current era as it offers a fixed term with a fixed return to the investors. It is basically an investment offered by banks where one can invest a sizeable amount of money. This is because the Fixed Deposit Interest Rate is pre-decided for a fixed period.
What are the important things to keep in mind while choosing a Fixed Deposit Plan?
- Tenure
You can invest in an FD for as short as 7 days and for as long as 10 years. So, ensure that you choose the tenure carefully, as you will be required to remain invested in the account for the selected duration.
- Minimum Account Balance
It is also essential to check the minimum amount that you need to open an FD account. Most financial institutions allow you to open FD for as little as Rs 10,000.
- Rate of Interest
As banks or financial institutions fix their FD interest rate, it is very important to compare the rates offered before investing your hard-earned money.
- Maturity Date
When you invest in an FD, you also come to know the exact date of its maturity. So if you are opening an FD account for a particular purpose, double-check the maturity date to ensure that the FD matures at the right time.
- Premature Withdrawal Penalty
This type of investment comes with an early withdrawal facility. However, you are required to pay the penalty for the same. So do check this penalty as well before opening the account.
- Auto-Renewal
With the help of this facility, your principal amount and the accrued interest are re-invested for a duration of your choice.
One of the most important steps before stepping into this investment cycle is to use an FD calculator. Honestly, I have used this calculator offered by the Bajaj Finserv application, which is pretty easy to use.
How to use this calculator?
- Download the Bajaj Finserv app from the App Store/ Play Store on your iPhone/Android.
- Sign up after entering your personal information
- Log in
- On the home page, tap on three bars on the top right.
- Choose the ‘Try our Calculators’ option.
- Go to ‘Deposits Calculators’
- Choose ‘Fixed Deposit Interest Calculator’.
- Fill in the required details
- Experiment as per your requirement.
All in all, there are several factors that one needs to keep in mind before investing in a fixed deposit. So, make sure you are alert at every step and calculate fd interest beforehand to know exactly what you’ll be getting on your investment.
