• How to Invest in FD

    Fixed deposits are among the most popular deposit schemes for Indian consumers. The high rates of interest for flexible tenures ranging from 7 days to 10 years make it the ideal solution for both short and long term investments. The popularity of FDs has only grown over the years as more and more consumers realize the potential for higher returns through this financial product.

    Fixed deposits are offered by almost every bank operating in the country, be it a private sector one or a public sector undertaking (PSU). There are also lots of other private non-banking financial companies (NBFC) that offer fixed deposit schemes to customers. NBFCs typically give better interest rates to customers, but may lack in credibility in terms of long term assured returns that is associated with government-backed organizations.

    Should I be happy with my FD scheme?

    Technically, the interest rate offered to you by a bank or an NBFC is the actual return you will get from the account. You will probably make various permutations and combinations to find the ideal deposit amount and tenure for your needs, apart from technicalities such as frequency of payouts that help in maximizing returns. You would ideally decide the product of your choice only after exhaustive research. It doesn’t look like there’s more room for improvement here, right?

    But even within fixed deposits, the interest rate should not be taken as the absolute law for returns. You can perform your own tweaks to earn higher returns while ensuring liquidity at all times - a concern with FDs seeing that premature withdrawal of accounts results in reduction of returns. Timing your fixed deposit is an important element of maximizing your returns. And the timing factor isn’t limited to finding the right tenure only – with detailed planning you can save assured returns from multiple accounts, each with different maturity periods. This is where laddering deposits come into play.

    Laddering fixed deposits – enhancing your returns

    How to Invest in FD

    Any way you look, the point of FDs is to get higher returns in a relatively risk-averse manner when compared with stock markets or mutual funds. The best returns are from long-term deposits, but these hamstring you in terms of liquidity. Fixed deposits are meant to stay invested till maturity and banks employ different charges to ensure that it stays that way.

    Laddering deposits is a way of staggering out your investment into multiple fixed deposit accounts to earn high returns, while being welcomed with liquidity at regular intervals. As the name suggests, laddering deposits is basically staggering your deposits into individual ‘ladders’, and you climb the ladder one rung at a time. Okay, this may sound complicated but it’s actually not. Here’s how:

    Let’s assume you have a lump sum of Rs.5 lakhs that you want to invest in a less risky fixed deposit offering interest at around 9% p.a. rather than a high-performing but volatile mutual fund. So, you start by timing your deposits so that you have liquidity at regular intervals. You invest Rs.1 lakh in a 1-year fixed deposit, another Rs.1 lakh in a 2-year FD and so on till a 5th fixed deposit of Rs.1 lakh and 5 year maturity. This means you have invested all the cash in 5 different fixed deposits, each maturing one-year apart.

    Next, as the 1-year deposit matures, you get a return of Rs.1.09 lakhs. So far, so good. This amount is then invested in a 5-year deposit, which effectively creates the 6th step or rung of the ladder. If you are lucky, the rates at this point of time may be something like say 10%. You do the same for the 2-year deposit, creating a 7th step and so on. By doing this, you have ensured that you will always have sufficient liquidity for emergencies without compromising your long-term deposits. Another major advantage is that you can stay on top of rate changes, by investing at the right time and ensuring maximum returns.

    Benefits of laddering deposits

    Laddering deposits offer a host of benefits not limited to easy liquidity. At the core, this method will help you stay in control of your investment at all times.

    Premature withdrawal losses reduced

    Laddering deposits will help you in reducing losses from premature withdrawal. Generally, banks will charge some extra amount when you opt for premature withdrawal. With laddering deposits you can also wait for better rates in the market to invest in. As each of the ‘steps’ matures, you can invest in some other financial instrument offering higher returns as per your risk appetite.

    Liquidity

    In the last point, you could leverage better interest rates by investing in laddered deposits. You are also empowered by liquidity at regular intervals. As shown in the example, you could ensure liquidity every one year, or even every 6 months or 4 months by laddering your deposits accordingly.

    Consistent returns

    Laddering might not help much in getting higher returns in a go, but it will surely ensure that your returns are steady. Laddering is ideal for senior citizens who have lump sum retirement funds to invest, as they will be ensured steady returns on a monthly, quarterly, or any other periodical frequency.

    A point to note here is that laddering is not a perfect science. If rates are lower one year down the line than what you are depositing for now, then you might stand to earn lower returns. However, in the long run, laddering is more likely to offer better returns, than say a 10 year-fixed deposit that comes with a clause of premature withdrawal for extra charge.

    Ideal customers

    The ideal situation where people can go for laddering deposits would be:

    • Retirees who rely on income from interests for their daily expenses.
    • People who are not too sure about long-term FD investments and want to have flexibility in reinvesting their money can opt for laddering FDs.
    • People with short-term goals like vacations or big purchases can also benefit from laddering.
    • In terms of long-term deposits, laddering will help you in preventing your investment from maturing at lowest rate cycle interests.

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    How To Invest In FDs Reviews

    • SBI Fixed Deposit
      "Good in FD service"
      0.5 5.0/5 "Blown Away!"
      I am having a savings account with State Bank of India hence i have selected the Fixed deposit investment scheme with them. They are providing the interest rate of 8%. I have invested the money 2 years back and there is a lockin period of 72 months.
      Was this review helpful? 31
      , visakhapatnam
      Reviewed on Mar 02, 2020
    • Kotak
      Kotak Fixed Deposit
      "Safe and secure"
      0.5 4.0/5 "Great!"
      Kotak Mahindra bank is a reliable bank and good management thats the reason i have invested the fixed deposit scheme in this bank. They have provided me a interest rate of 7% and i have kept for the period of 1 year and 1 month. Overall, I'm satisfied with their services.
      Was this review helpful? 5
      , ahmedabad
      Reviewed on Mar 01, 2020
    • HDFC Bank Fixed Deposit
      "Safe and Secure"
      0.5 5.0/5 "Blown Away!"
      I have purchased HDFC Fixed deposit which I am renewing for every 13 months. They have given me an interest rate of 7% and There is no processing fee and there is no locking period as well. If I'm withdrawing FD amount before locking period, they are charging some amount.
      Was this review helpful? 15
      , ahmedabad
      Reviewed on Mar 01, 2020
    • Punjab National Bank Fixed Deposit
      "PNB Fixed Scheme is good"
      0.5 5.0/5 "Blown Away!"
      I went to the nearby branch for the Punjab National Bank for taking my fixed deposit as per my family members recommendation. I have invested the money of Rs. 50000 there was a lockin duration of 6 years when i withdraw the money, i got the money of Rs.1 lakhs. They have offered me a interest rate of 7%.
      Was this review helpful? 11
      , jamshedpur
      Reviewed on Feb 27, 2020
    • Post Office Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I was having my savings account from Post office hence i have invested my money into Post office Fixed deposit scheme. I have invested the money of Rs. 25000. There is a lockin period of 10 years. I have invested the money in the year of 2011. Post office service is proper. Overall, I'm happy about the services.
      Was this review helpful? 37
      , chennai
      Reviewed on Feb 25, 2020
    • HDFC Bank Fixed Deposit
      "FD is not good with HDFC"
      0.5 4.0/5 "Great!"
      I have invested some money as a Fixed deposit in HDFC Bank and the interest rate is not that much great because they are giving interest as compared to others. I have invested the money of Rs. 3L and there is a locking period of 5 years. Its 7% interest rate. If they are increasing the interest rate, it would be fine. Since I do all my transactions with this bank, I have selected same for my FD as well.
      Was this review helpful? 14
      , bangalore
      Reviewed on Jan 31, 2020
    • SBI Fixed Deposit
      "Good support"
      0.5 5.0/5 "Blown Away!"
      I have chosen my fixed deposit scheme from State bank of India because I'm maintaining my salary account with them and they provided rate of interest is fine for me. I have invested the money of Rs. 2.75 lakhs. There is a locking period of 45 days. They are giving interest rate of 4.5%. Overall, I'm satisfied with their services.
      Was this review helpful? 22
      , namakkal
      Reviewed on Jan 18, 2020
    • Kotak Fixed Deposit
      "Good App"
      0.5 5.0/5 "Blown Away!"
      I have been investing the money of Rs. 3 lakhs for the fixed deposit. I have selected Kotak mahindra bank for the FD because their net banking facility is very different when i compared to other. I can access everything regarding the account hence its easy to handle the transactions. I'm not sure about the interest rates. 7 months before, i have invested the money.
      Was this review helpful? 11
      , bangalore
      Reviewed on Jan 08, 2020
    • Kotak Fixed Deposit
      "Excellent Services"
      0.5 5.0/5 "Blown Away!"
      Its because of the competitive interest rates, i have selected the Fixed deposit in Kotak Mahindra bank. I have invested the fixed deposit 1.5 years ago and there is a lockin period of 5 years. They have invested the amount of Rs. 7.5 % and the employees are helpful in the branch.
      Was this review helpful? 8
      , mumbai
      Reviewed on Jan 08, 2020
    • Axis Bank Fixed Deposit
      "Good Savings scheme"
      0.5 4.0/5 "Great!"
      I have a Fixed deposit in Axis bank. I have invested the money of Rs. 10000 for two FDs. There is a lockin duration of 1 year. They are giving a interest rate of 7%. Through net banking, i have activated this Fixed deposit. There is no tax benefits available. Axis bank service has been good. Overall, I'm happy about their services.
      Was this review helpful? 8
      , kolkata
      Reviewed on Dec 31, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Good Scheme"
      0.5 5.0/5 "Blown Away!"
      Since last 15 years, i have a account with Oriental bank of commerce thats the reason i have invested the money in fixed deposit with the same bank. I have invested the amount of Rs. 11 lakhs. They are giving the interest rate of 6.5%. There is no locking period but i have chosen the duration of 1.5 years. There is no additional charges deducted for this fixed deposit.
      Was this review helpful? 17
      , bulandshahr
      Reviewed on Dec 03, 2019
    • Post Office Fixed Deposit
      "Good Service"
      0.5 4.0/5 "Great!"
      Interest rate is very low in Indian post office Fixed deposit scheme because they are providing only 8.5%. I have chosen this office because of the child benefits. I have invested the money of Rs. 1.5 years. Its 3 years lock in period. Overall, I'm satisfied with the service provided by post office employees.
      Was this review helpful? 61
      , parvathipuram
      Reviewed on Dec 03, 2019
    • SBI Fixed Deposit
      "Good bank for Fixed Deposit"
      0.5 4.0/5 "Great!"
      I have invested the money in SBI for a fixed deposit and based on my wife recommendation i have chosen it. They are providing the interest rate of 7.25%. They have option to select the lock in period in that i have chosen 5 years. We had visited their branch and the response was good.
      Was this review helpful? 34
      , mumbai
      Reviewed on Nov 12, 2019
    • HDFC Bank Fixed Deposit
      "Good one"
      0.5 4.0/5 "Great!"
      Its easy accessible and to redeem so that i have invested the money in Fixed Deposit with HDFC BANK. I have invested the money of Rs. 2.5 lakhs and they have provided me a interest rate of 7.5%. There is no locking period. I didn't got any additional charges till now.
      Was this review helpful? 20
      , hyderabad
      Reviewed on Nov 12, 2019
    • Post Office Fixed Deposit
      "Safety deposit"
      0.5 5.0/5 "Blown Away!"
      I have paid the money of Rs. 4.5 lakhs as a fixed deposit in the Indian post office. For the safety purpose, i have chosen the post office account. They are offering me a interest rate of 7.9%. There is a lockin period of 5 years. If i withdraw the money in 1 year, they will reduce the interest rate of 2% and after 3 years, its 1%.
      Was this review helpful? 112
      , jaipur
      Reviewed on Nov 08, 2019
    • Central Bank of India Fixed Deposit
      "Good Bank"
      0.5 4.0/5 "Great!"
      Interest rates are less in Central Bank of India so I had taken a fixed deposit. I have invested the money of Rs. 1 lakh in my wife's name. Branch is near from my place so I have chosen this bank. Yearly once, I get the money of Rs. 6,765 for the interest. There is a locking period of 1 year.
      Was this review helpful? 14
      , tirupur
      Reviewed on Nov 06, 2019
    • ICICI Bank Fixed Deposit
      "Customer centrice & User friendly app"
      0.5 4.0/5 "Great!"
      I am doing Fixed Deposit with ICICI BANK and its been around 5years. They haven't been paying good interest and its more or less same like other banks as I used to hold my salary account with ICICI, I have decided to be with one bank. There is no locking period and its flexible. They do give good support and the app is user friendly. Even deposit account can be opened through i-mobile or net banking itself.
      Was this review helpful? 20
      , nasik
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Good"
      0.5 3.0/5 "Satisfactory"
      I had a Fixed Deposit in State Bank of India, I have completed the tenure before 3months ago. I have no issues with the customer service. They are given me 7% interest rate for 2years. There is no profit and processing fee. I got an online access, where I can check the interest rate anytime on the YONO app or else SBI online.
      Was this review helpful? 31
      , tirupati
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Interest charges are good. "
      0.5 3.0/5 "Satisfactory"
      I have invested some money through FD. My salary account is in SBI so i have a zero ATM charges and the limit is not actually set by SBI. They do have short term FDs which is pretty good. I have invested the money of Rs. 60000 and the interest rate is 10.01% for the tenure period of 16 months. There is no lockin period. There is no hassle to getting the money back.
      Was this review helpful? 43
      , kolkata
      Reviewed on Oct 01, 2019
    • Dena Bank Fixed Deposit
      "Good plan for senior citizen"
      0.5 2.0/5 "Expected more"
      I have invested the money in Dena bank through Fixed deposit and the growth is not that much good. They are not taking any hidden charges. Only because of the Government undertaken bank, i have selected them. They are providing a interest rate of 6% per annum. I have invested the money of Rs. 2 lakhs. There is a lockin period of 1 year.
      Was this review helpful? 17
      , new delhi
      Reviewed on Sep 24, 2019
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