If you are worried about security, Fixed Deposit are the best investment option for you.
They are free from market risks. That means your principal amount will be protected. You can withdraw your fixed deposit whenever you are in urgent need of funds.
Guess what? You will not have to worry about the downward trends in the market.
However, FDs do not give extraordinary returns. Then, how can you maximize your returns from fixed deposits?
Don’t worry for we have got you covered.
Tips To Maximize Your Returns on Fixed Deposits
1. Do Not Withdraw Before Maturity
Make sure you keep your FDs for the full term. Do not withdraw them before maturity unless it is urgent. Withdrawing your fixed deposits earlier will cut down on your interest payments. Your bank or NBFC will charge a penalty on your interest.
Keeping the FD for the entire term will ensure you get the maximum returns. If you need money, you can take a loan against your FD. You will get it at a lower interest.
Moreover, that will also stop you from withdrawing your deposit prematurely.
2. Go for Cumulative Deposits
Cumulative fixed deposits are those where your interest gets compounded periodically. Therefore, they are an excellent way to grow your money in the long term.
If you opt for non-cumulative deposits, the bank will pay out your interests monthly or quarterly. So, your money will not be able to grow in the long run. Thus, if you want to get the maximum returns, cumulative deposits are the best option.
3. Check Who Is Giving The Highest Interest On FD
Do your research before investing in an FD. You can compare the interest rates of different lenders. That will make sure you get the best rates in the market. Going for the highest interest rates on FD will maximize your returns on the deposit.
4. File your Income Tax Returns on Time
Filing your returns on time will ensure you get all the tax benefits. Moreover, you should be aware of all the changes in the tax norms so that you do not miss out on any benefit.
FDs are an excellent way to save on your income tax payments. And, getting tax deductions will make you get higher returns on your deposit.
5. Go Beyond Bank Fixed Deposits
Don’t stick to banks only. These days, you can open a fixed deposit account with an NBFC or housing finance company. They might offer higher interest than banks.
Fixed deposits can help you meet your urgent financial requirements. If you follow these tips, you will be able to get the maximum returns.
PNB Housing Finance offers competitive interest rates on FDs. Moreover, you can open an online FD account.