In order to get maximum returns on your fixed deposits in India, you need to consider five important factors. Inflation, interest rates, taxation, liquidity, and the bank’s credit rating are some of the factors to consider. Best fixed deposit rates in India are essential to consider since they are predetermined at investment time and remain constant throughout the deposit.Â
In addition to tax exemptions and the best fixed deposit rates in India, senior citizens are entitled to higher tax exemption limits. Investments in fixed deposit accounts aren’t liquid, and premature withdrawals are penalised. Investing with a bank with a higher credit rating means a lower risk of default. Investments in fixed deposits should also consider inflation. It offers attractive interest rates, flexible terms, and easy account management with fixed deposits offered by Bajaj Finserv, India’s leading financial services provider.
Fixed deposits are an investment option that a lot of Indians have today. They are a safe and secure option that increases in value overtime. When choosing a fixed posit option for yourself, there are certain aspects that you need to consider if you wish to get the best fixed deposit rates in India And maximum returns in the long run. When it comes to your FD investment, there are certain points that you must know before investing in a fixed deposit account in India.
Interest ratesÂ
The interest rate your financial institution has given you is one of the most important factors to consider regarding any fixed deposit scheme. The interest rate tells you how much interest you will earn on the investment. The interest rates vary from 3% to 7% depending on the financial institutions providing the fixed deposit plan. Most interest rates on fixed deposits are predetermined at the time of investment and remain constant during the deposit duration.Â
The duration of the fixed deposit account inversely affects the interest rates. As a result, the interest rates increase with the duration of the deposit. You can earn higher returns if you invest in a fixed deposit with a longer tenure.Â
Taxation
Fixed deposits earn interest that is taxed. Once added to your total income, interest on fixed deposits is taxed at your applicable tax rate. There is a difference in tax rates based on your income slab. In this regard, it is crucial to consider the tax implications of fixed deposits.
Senior citizens in India are also entitled to a higher tax exemption limit on interest earned on fixed deposits. The interest rate on fixed deposits for senior citizens is higher. You can save on taxes and earn higher returns by investing in fixed deposits if you are a senior citizen.
Liquidity amount
Liquidity is not a strong point of fixed deposit investments. If you invest your fixed deposit money for a specific tenure, you cannot withdraw it before maturity without being penalised. It would help to consider your liquidity needs when choosing a fixed deposit.
If you require liquidity within a short period, you may want to consider fixed deposits with shorter tenures. If your investment horizon is long-term, you might consider longer-term deposits to earn higher returns from fixed deposits.
Credit rating of the bank:
The bank’s credit rating should be considered before investing in fixed deposits. It indicates whether or not a bank can meet its financial obligations based on its credit rating. Your investment is safer if your credit rating is higher since a higher credit rating indicates a lower default risk.
Ensure the bank you’re investing with has a good credit rating before investing in a fixed deposit. There are several rating agencies where you can check a bank’s credit rating, including CRISIL, ICRA, and CARE.
Currently, the inflation rate is
Before investing in fixed deposits, it is important to consider the effect of inflation. As a result of inflation, your investment loses value over time. Inflation exceeds interest rates, so fixed deposits will have negative real returns. The inflation rate should be taken into account when making fixed-deposit investments. Alternative investment options with higher returns are more likely to be available at higher inflation rates.
Fixed deposits offer a guaranteed return due to their safety and security. Before investing in fixed deposits, it is necessary to consider the interest rates offered by the bank, the taxation, the liquidity, the credit rating of the bank, and inflation. You can maximise your investment returns by considering these factors when making an investment decision.Â
Bajaj Finserv, a leading financial services provider in India, offers fixed deposits among its investment options. The Bajaj Finserv fixed deposit account offers attractive interest rates, flexible tenures, and easy online account management. Moreover, seniors receive a higher interest rate and premature withdrawals are penalised.Â
Besides auto-renewing fixed deposits, Bajaj Finserv also ensures the growth of your investment. Bajaj Finserv’s fixed deposit scheme is a great option for those seeking a strong credit rating, trust and reliability reputation, and a safe and secure investment option.