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Before investing money in FD, know these 5 important things, you will be able to get more returns on less investment

Fixed deposit: The term of FD can be from 7 days to 10 years. It also has three categories. Short term in which FDs are held for a tenure of less than 1 year. Mid term i.e. FD between 1 year to 3 years and in long term this period is more than 3 years.




Banks have different investments and means of getting returns. Just need to know deeply about those tools and investment methods. One of these is Fixed Deposit (FD) which is considered to be the most reliable as a means of earning. People also open FDs in banks and financial institutions keeping in mind the retirement. Since FDs offer high returns and the investment in it is completely safe, people consider depositing money in it as the right option.

Despite all this, it is important that whenever you start taking FD, then you should match the different interest rates of banks and NBFCs. This will give you an idea of ​​which bank is likely to get how much return. By calculating all these maths, you can get a good return on your deposit.

1-Interest is dependent on many factors
It is to be noted here that the interest rate on FD depends on many factors. Such as the bank, the tenure of the deposit and the type of investor, all these things affect the interest rate. Among the different benefits that come with FDs, a special one is to withdraw money in an emergency. If someone suddenly needs money, then he can withdraw money by paying some fine.

2-Banks cannot make changes
This deposit scheme has also been named Fixed Deposit because once the money is deposited, the bank has to return the return according to the interest rate agreed upon. This rate is not affected by market fluctuations. It is not that the bank should make any changes in it in future.

3-Different term FDs
The term of FD can be from 7 days to 10 years. It also has three categories. Short term in which FDs are held for a tenure of less than 1 year. Mid term i.e. FD between 1 year to 3 years and in long term this period is more than 3 years. Now the person investing has to see how much risk they can take with their money, for how many years they can block their money or what are their needs going forward. When these things are taken into account, then make a comparison between banks and non-banking financial institutions (NBFCs) and decide where to get FD.

4-Check whether the bank is registered with DICGC or not
According to the instructions of the DICGC, deposits up to Rs 5 lakh in banks are safe and there is a complete guarantee of getting that much money if the bank sinks. Whenever you go to get FD, find out whether that bank is registered under DICGC or not. For this, banks have to register with the Reserve Bank, for which banks have to pay some amount. Not all banks or NBFCs are necessarily registered under this insurance policy.

It is also necessary to see 5-rating
Similarly, banks and NBFCs have defaulter ratings. If a bank is in AAA or AA rating, it does not mean that it cannot default. It is believed that AAA-rankings point to the lowest default. By seeing this ranking, you can open FD with your money in any bank or NBFC. Keep in mind that the FD of the company is not insured by DICGC.

Compare Banks and NBFCs
How long is the term of the FD and the type of FD, its interest rate depends on it. In view of this, make sure to compare the term and interest rate between banks and NBFCs. You can re-deposit the FD on maturity, which will further increase the quantum of returns. In case of emergency, you can also take a loan against FD.

It is better to break FD when there is an urgent need of money, then take a loan against FD and pay off its money gradually. The number of days the FD is there, you can repay the loan comfortably in that number of days. Loan against FD is considered as a secured loan. You can take up to 90-95 percent of the FD amount as a loan. There is a rule to repay this loan before the maturity date of the FD.

Parvesh Maurya
Parvesh Maurya
Parvesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ informalnewz@gmail.com
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