What You Need To Know About Highest FD Rates In India

The interest rates of fixed deposit plans have remained low this year and by looking at current economic conditions it might remain low for the rest of the year as well. However, despite this, you might need to invest some of your savings in fixed deposits as the safety of the capital is also as essential as appreciation in this scenario.  

Apart from being a risk-free instrument, fixed deposits also provide other benefits like fixed interest rates, easy investment procedures, the flexibility of tenor, etc. Also, you can ensure high returns from an FD by implementing some of the below recommendations in your financial plans:

Benefits of investing in Company FDs 

Leading banks of India are providing interest rates ranging from 4 to 6% for investment tenor of 1 year and higher. For higher FD interest rates 2020, you can explore the fixed deposit schemes offered by NBFCs. 

For instance, Bajaj Finance is offering interest rates as high as 7.35% which is one of the highest FD rates in India. These FDs also ensure the safety of capital as they have received high ratings from ICRA (MAAA/stable) and CRISIL (FAAA/stable).

You also get a 0.10% additional interest rate on booking a fixed deposit online with the help of an online FD form.

Ladder your investments 

To ensure higher returns you can split your corpus in multiple FD plans. Furthermore, use different tenor, FD type, and investment amount for each of these FDs to ladder your deposits smartly.

This will average out the difference of fluctuations in fixed deposit interest rates, provide more liquidity options, and you may also get the opportunity to consolidate returns of a couple of FDs at a higher FD rate in the future. 

To predict your returns in advance, you can also use the fixed deposit calculator provided on the portal of the respective bank or NBFC. 

Systematic Deposit Plan 

After investing the major chunk of your savings in FDs, you might need a backup plan to satisfy your short term financial needs. The Systematic Deposit Plan introduced by Bajaj Finance is a good option for those who want to multiply their savings faster without investing a lump sum amount.

In this plan, you can invest Rs. 5000 or higher every month. There are two ways of investing in an SDP. If you adopt the first way, you will have to pick a tenor up to 60 months for each deposit and the number of deposits ranging from 6 to 48 can be made as per your financial obligations. You will receive the accrued interest with deposit amount subsequently after tenor completion as these deposits will mature one by one. 

The second method provides the same options when it comes to the deposit amount, the number of deposits, and tenor. However, you have to choose a particular date on which all your deposits will mature. The first FD will earn interest for the full tenor and the tenors for the subsequent monthly deposits will be lesser as all of them have to mature on the same date. This method enables you to receive the entire deposited amount and interest earnings at once.

With SDP, you might also benefit from the interest rate that is prevailing on the date of deposit and they are also as stable and safe as the fixed deposit plans from Bajaj Finance.

Bank FD rates have remained low this year and this trend might continue at least for this year. Despite that, fixed deposits are still one of the most preferred instruments as they offer ease of investment, the flexibility of tenor, and fixed interest rate for the entire tenor. Also, you can ensure higher returns by splitting your funds in multiple FDs and you can also invest in corporate FDs like Bajaj Finance FDs that offer interest rates up to 7.35%. You can also think of SDPs as they are short term investments that help you to meet your financial needs that might arise in the immediate future.

Author Bio:

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory.

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