How to Select the Best Fixed Deposit Scheme?

For attaining your financial goals, it is necessary to align them with your financial planning. There are many investment instruments through which you can attain your goal like investing in a fixed deposit scheme. A fixed deposit is a type of investment wherein you park a lump-sum amount for a fixed tenure and get a fixed rate of interest on it throughout this tenure. In this way, it is considered as a good way to save money for achieving short-term goals like purchasing a car or purchasing some expensive jewelry for your spouse on your next wedding anniversary or investing money for the school fees of your toddler after three years, etc. A fixed deposit (FD) is considered a secure investment option as it provides guaranteed returns.

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To start investing in a fixed deposit scheme, you may think about the best FD and how to select it. Here we are discussing some points following which you can select the best FD scheme.

Comparison Between
Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund
Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund
Guaranteed Return Plans
Returns Before Tax
7.5% (TAX-FREE)
Returns After Tax
7.5%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
awards
Still Better than FD’s and Debt Mutual Fund
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
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*For annual premium upto ₹5 Lacs

How to Select the Best FD Plan?

Follow the below-mentioned tips while finalizing a fixed deposit scheme:

  1. Select a Bank or Non-Banking Financial Company that Offers At Least 5% Interest Rates:

    In the current time when the economy is falling and the rate of interest on FD are decreasing day by day, opt for a lender that offers at least 5% rate of interest for a tenure of two to three years. SBI interest rates on fixed deposits for a tenure of two to three years is 5.10%. There are some other banks as well that offer the same or somewhat lesser rate of interest on FDs for this tenure, you can consider them as well. However, do not go below this as going below this may not solve your purpose of investment in an FD

  2. Cross-Check the Credibility of the Corporate or NBFC:

    If you are planning to opt for an FD plan offered by some NBFC, before submitting the form for it, review the credibility of your lender. You can perform this by examining the safety ratings that a fixed deposit offers. The rating agencies like ICRA or CRISIL give this rating. Therefore, when you look out for an FD, prefer CRISIL's FAAA rating and ICRA’s MAAA rating.

    fd return beater
  3. Select a Bank Fixed Deposit by Following the Below Tips:

    The fixed deposit plans offered by a bank are the most sought-after schemes for savings. A bank FD offers a higher rate of interest than normal savings account with that bank. Different banks offer different interest rates. However, the rate of interest on FD by banks is regulated by RBI that guarantees up to Rs. One Lakh against insolvency of that bank. Even though bank FDs offer a low rate of interest as compared to corporate or non-banking financial company FDs but they guarantee assured returns. Here are a few points that you must keep in mind while selecting a bank for opening an FD account:

    • Unlike corporate FDs, the fixed deposit schemes offered by a bank are independent of ratings.

    • As an investor, you must consider many other features like maturity amount, inflation-adjusted FD returns, interest after tax, etc.

    • Most of the investment experts suggest sticking to Public Sector Banks over private banks for the safety of returns.

    • Different banks provide a varied rate of interest and investment tenure. As an investor, you must perform a comparative analysis before depositing your money in an FD scheme.

    • You must know the clause for premature withdrawal that can vary from bank to bank.

    • There are different types of fixed deposit schemes that are offered by various banks.

  4. Select Between Non-Cumulative and Cumulative FD:

    Depending on your choice of interest on maturity or periodic returns, you can choose an FD type between non-cumulative and cumulative FDs. With non-cumulative fixed deposits, you can get monthly, yearly, quarterly, or semi-quarterly earnings. Whereas, with cumulative FDs, you get the final amount upon maturity. Generally, cumulative fixed deposits offer higher pay-outs, so you can select them if you do not want to get periodic pay-outs.

    Guaranteed return plan Guaranteed return plan
  5. Select a Bank or Corporate that Has Easy Application Process:

    The process of application for FDs varies from lender to lender. Some lenders do not provide an online application process and want you to visit their branch for opening an FD account. On the other hand, some lenders offer online application process and make sure that their application process match to your expectations and preferences. For instance, if you are very busy and cannot visit a branch of a lender, opting for an online process is suggested. Make sure that the steps for online application are less and you do not have to provide many forms and documents.

  6. Rate of Penalty:

    Another point to consider here is the rate of penalty upon premature withdrawal. Uncertainty can knock on the door of any one of us and at that time if you want to withdraw money before the completion of the tenure of your FD, the lender's levy penalty. The rate of penalty can vary with the lender, so consider this point as well.

FD interest rates India have fallen consistently over the last 12 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years

The Bottom Line!

You can make the most of your investment by selecting the right FD scheme. By considering the aforementioned factors, you can make the right decision. However, make sure that your investment plan aligns with your investment goals so that you can meet them as per your need.

Allahabad Bank FD Interest Rates

Allahabad Bank FD Interest Rates

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Andhra Bank FD Interest Rates

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Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of India FD Interest Rates

Bank of India FD Interest Rates

Bank of Maharashtra FD Interest Rates

Bank of Maharashtra FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Canara Bank FD Interest Rates

Canara Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Central Bank of India FD Interest Rates

Central Bank of India FD Interest Rates

Citibank FD Interest Rates

Citibank FD Interest Rates

City Union Bank FD Interest Rates

City Union Bank FD Interest Rates

Corporation Bank FD Interest Rates

Corporation Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

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Dhanlaxmi Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

HDFC Bank FD Interest Rates

HDFC Bank FD Interest Rates

HSBC FD Interest Rates

HSBC FD Interest Rates

ICICI Bank FD Interest Rates

ICICI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDFC First Bank FD Interest Rates

IDFC First Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

IndusInd Bank FD Interest Rates

IndusInd Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Muthoot Capital

Muthoot Capital

Nainital Bank FD Interest Rates

Nainital Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

PNB FD Interest Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

RBL Bank FD Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Interest Rates

Shriram Finance FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Travancore FD Interest Rates

State Bank of Travancore FD Interest Rates

Syndicate Bank FD Interest Rates

Syndicate Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Interest Rates

UCO Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Union Bank of India FD Interest Rates

Union Bank of India FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Yes Bank FD Interest Rates

Yes Bank FD Interest Rates

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