May 24, 2024

6 Easy Ways to Get Highest FD Interest Rates on Fixed Deposits

FD Interest Rates

Investing in a fixed deposit or term deposit is a good way to ensure high returns without subjecting your invested capital to any risks. Due to adverse economic conditions, it is wise to balance the risk-return ratio by minimizing investment in market-linked instruments like equity.

However, even the interest rates on FDs are seeing a downward trend these days. The reduction in repo rate has been one of the major reasons due to which the banks have reduced the interest rates on their fixed income instruments as well.

Therefore, it has become essential for you to deposit in FD plans that offer a high FD interest rate irrespective of the present economic scenario. Here are 6 easy ways that can help you achieve that:

1. Go for non-bank FDs

While most of the banks have been reducing the interest rate of their fixed deposit plans, some non-banking finance companies are still providing much better rates. You can expect to get interest rates around 5 to 6.5% at the most by investing in a bank FD whereas NBFCs such as Bajaj Finance are providing interest rates up to 7.60% for regular customers and 7.85% for senior citizens.

2. Compounding returns

One of the best ways to ensure the swift growth of deposited money is to invest in a cumulative FD of a longer tenor. Cumulative FDs do not provide periodic interest payouts and therefore, the principal along with the accumulated interest gets compounded resulting in higher returns.

3. Renewal of FDs

You can also set your fixed deposits on auto-renewal which means that the FD will automatically renew once it has matured. This will avoid time wastage due to the formalities that are usually required to reinvest the returns. Some NBFCs also offer an additional interest rate on FD renewal. This means that you will get some extra interest rate than before which will ultimately help your savings grow at a faster rate.

4. Systematic Deposit Plan

The worsening condition of the economy might make you think twice before investing a lump sum amount in any of the instruments. However, you can start investing with a minimum deposit amount every month and still get the higher interest rates and benefits that are offered by an FD. For that, you will have to opt for a Systematic Deposit Plan (SDP) that is offered by Bajaj Finance wherein you can start investing a fixed amount per month instead of depositing a large sum of money at once. You can start by depositing Rs. 5000 for a tenor ranging from 12 months up to 60 months as per your choice. Moreover, the number of deposits can range between 6 to 48 depending on your financial requirements and convenience. Each deposit will be considered as an individual FD and the interest applicable on it (i.e. the interest rate prevailing on the date of the deposit) will be compounded periodically in the same way as a regular FD investment.

5. Laddering deposits

You can ladder your investments by investing in multiple FDs of different tenors and types. This will assure multiple liquidity points post maturity and you will be able to deposit your returns in FD plans that offer better interest rates that might have not been available earlier.

6. Stability

Stability should be the deciding factor for you while choosing an FD plan, especially in these uncertain times. There is no point in going for better returns if your invested capital is not safe. Go for FDs that are stable and guarantee high returns. For instance, Bajaj Finance FD is not only providing the highest FD rates in India but its fixed deposits are also highly rated for their safety and stability by ICRA (MAAA/Stable rating) and CRISIL (FAAA/Stable rating). You can choose the auto-renewal feature to multiply your funds as they are offering a 0.10% additional interest rate on FD renewal.

You can also calculate your returns in advance by using the FD calculator. You can also calculate the monthly interest using this calculator if you have opted for a non-cumulative FD.

Thus, you can expect high returns without worrying about market volatility if you invest in a stable and high-paying company FD.

Investing in a fixed deposit is your best option to grow your savings especially when the economic situation is not favourable for investing in market-linked instruments. However, since interest rates on bank FDs have gone down, you can invest in corporate FDs that offer high returns but are equally safe.

Bajaj Finance FD is providing interest rates up to 7.85% and its high stability rankings make it a preferred choice for investors when it comes to the safety of the investment. Moreover, features like online FD form, multi-deposit facility, flexible tenors, Systematic Deposit Plan, and more help you reap maximum benefits from your FD investment.