Fixed Deposit has been one of India’s most popular forms of investment due to its safety from market fluctuations. It is preferred by risk-averse investors who don’t want to lose their money to market risks but want a higher return than just putting their money in a savings account.
And as the returns you would receive are predetermined at the time of investment, most investors are looking forward to a rise in the Fixed Deposit interest rate. But will it increase or decrease this year? Let us find out.
What is a Fixed Deposit?
A fixed deposit is a form of investment offered by banks and NBFCs unaffected by the market. You will receive a guaranteed return on maturity, which can be automatically reinvested.
One thing to keep in mind is that if you break the FD, then you will be charged a penalty based on your investment partner. So make sure to keep some money aside for your usual expenses.
What is the current interest rate, and will it change?
The current FD interest rate range from 2.50% p.a. to 9.10% p.a. After a recent hike in the repo rate of 2.4%, several banks have already passed on the benefits to short-duration FDs(7 days to 12 Months), and some of it to long-duration FDs(5 Years to 10 Years) which is expected to further increase in the coming days.
So a good option might be to invest some of the money into a short-duration FD for the waiting period, and once that investment matures and there is a hike in the long-duration FDs, you invest it there.
Which is the best app to invest in FD?
Ever since a few years ago, I have completely shifted to Bajaj Finerv. It is the best app for my needs as it is basically a super app for everything financial. From UPI to Insurance, from Mutual Funds to Fixed Deposit, from gold loans to home loans, it is a one-stop shop for everything without needing to download ten different apps for all of these.
How to Invest in Fixed Deposit?
Nowadays, it is effortless to invest in FDs. Here are the steps I follow to invest in FD using Bajaj Finserv.
- Download the app from the App Store or Play Store.
- Sign up after entering your mobile number
- On the home page, you will see an icon for Fixed Deposit.
- Click on it and use the in-built fd interest rates calculator to simulate different situations by changing the customer type, deposit amount, tenure, and interest payout frequency.
- This will help you make the best decision and get the best return on your investment.
- Once you are satisfied with it, click the invest now button on the FD page.
- Fill in those values, and you are good to go.
Conclusion
Now that you know, you can make an informed decision when investing and use these steps to calculate fd interest to get the best return on your investment.
While FD interest rates are expected to increase in the future, you should only partially depend on them as certain unfavourable circumstances can result in a drop in interest rates.