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How To Identify Right Fixed Deposit PackageBy Expert Author: Neha Sharma
A fixed deposit is an ideal investment option, which is not only provides a safe investing, but it also gives high returns. There are various factors that influence the fixed deposit and impact your returns. Therefore in order to get the best out of your investment in fixed deposits, we give you the right points to identify the best fixed deposit package for you.
• Interest rates
The interest rates vary from bank to bank, depending on the services they provide. They give you a stable and fixed return on the invested money. The interest rate is fixed during the tenure of the fixed deposit. Most of the banks provide an interest of 4 -10% on most fixed deposits. Since the actual benefits or the income from the fixed deposit is influenced by the fluctuating inflation, this can impact the interest rate of the amount that you put in the deposit. Thus, if the inflation rate rises, it can lower your return on investment thereby affecting the value of your deposit. Thus when you are investing in fixed deposit, always check the market for any possible fluctuations alongside the offers of the banking institutes.
Most banks have different tenures for fixed deposits.They range from a week to several years. Some banks even offer to have your interest be deposited directly in the fixed deposit account thus you can gains compound interest of the interest from the next deposit cycle. Since fixed deposits earn interest rates for their entire tenure, you can ideally have multiple fixed deposits, with different tenures, to ensure that you can have a regular income. This is normally a popular option for retirees.
• Fixed deposit as a collateral
Some banks offer the option of offering a loan against your fixed deposit. This is an ideal option if you do not have collateral for the application of a loan, as this gives you a chance take a loan with lower interest rates. Loans against FDs are a cheaper option as compared to personal loans, which most banks charge interest rates of 20%. Most banks give you advance of up to 80 to 100% of your fixed deposit amount as a loan. Since banks are comfortable giving these loans as there is no fear of non-performing assets, this is an ideal option.
So, with such diverse benefits, you must select the fixed deposit that serves your immediate and long term financial needs the best.
Author Bio :- Neha Sharma; a finance student has gathered a lot of information and knowledge about Fixed Deposits. She is eager to share this information to the public so that they can understand the process and benefit from it.
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