Saturday, November 17, 2018

Financial Literacy: Here are 4 Basic Factors that Every Fixe

Financial Literacy

Investing in Fixed Deposits is a smart option. Read further to ensure you get the best interest rate on FD investments.

We all know that the Indian economy is growing by leaps and bounds, especially since it overtook China in 2015 with a 7.3% growth in GDP and is all set to hit 7.6% growth in 2016. With a diverse demographic, as well as youth to bolster the economy, it is surprising to know that more than 70% of Indian investors lack the basic knowledge about investments. Many of the youngsters as well as investing enthusiasts have displayed ignorance when it comes to selecting appropriate investment schemes that would give maximum returns, as well as a steady increase in the value of their investments. Here’s a list of few basic essentials that every Indian investor should know:

1. Understand How Investment Works

Many investors are unaware of direct plans of mutual funds, launched in 2013, which offer better returns with their low pricing. Investors suggest having a financial plan in place, before actually initiating their investment. More traditional approaches suggest investing in Fixed Deposits, which have a fixed return and an interest that does not change during the tenure of your deposit. Do compare the interest rates on the Fixed Deposits before opting for the scheme.

2. Decide the Tenure you Would Like to Opt

Many banks offer tenure period ranging from 7 months to 30 years. A shorter tenure is advisable so that you can estimate your returns in tandem with the market and adapt accordingly. Once you are comfortable with the interest on your Fixed Deposit, you can opt for longer Fixed Deposit terms as well. You can also then determine the kind of interest you would like to opt for, to get maximum returns over a longer tenure.

3. Check the Limits - How Much you can Invest

When it comes to investing in Fixed Deposits, you need to know the minimum amount that you can invest in the first place. Banks also have different levels, but a majority of them have a lower limit range of Rs. 1,000 to Rs. 10,000. There is no set upper limit for investment in Fixed Deposits. The Fixed Deposit term and interest rate would remain constant despite the changes in the repo rates or other market factors. So it would be great to have a plan with your finances in place.

4. Choosing the Interest Rates on Fixed Deposits

There are floating interest rates and fixed interest rates on Fixed Deposits. Fixed interest rates remain the same despite fluctuations in market rates, and are therefore generally preferable. However, floating interest rates fluctuate, and could give you more returns when the repo rates are lower. If you are not open to taking risks, then floating interests are the best option, as you may have higher returns in comparison to fixed interest rates at the end of your tenure period. Choose the best Fixed Deposit interest rates, based on your investment principles for maximum benefits. Look for the highest interest rate on FD for one year that you can avail to ensure you get the most from your Fixed Deposit.

These are some of the basic points that you need to keep yourself updated with, to start investing in the deposit schemes that interest you.

About the Writer

Daina Martin is a short story author, freelancer, and columnist for various newspapers, magazines, editorials, etc. She has written many articles for blogs like,,
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