Mumbai (Maharashtra) [India], January 29: Fixed Deposits (FDs) are a staple of Indian investing. They offer guaranteed returns with minimal risk, offering a safe and stable way to grow your savings. However, before investing, it is crucial to know the prevailing Fixed Deposit interest rates and the factors that influence them. This knowledge enables you to choose the ideal FD scheme and make the most out of your savings.
Whether you are new to investing or looking to optimise your portfolio, this guide will provide you with the insights you need to make informed decisions about your FD investments.
Fixed Deposit rates directly affect the returns earned on the principal amount deposited.
FD rates change periodically and vary significantly across banks and FD tenures. Thus, it is important that you do extensive research and compare rates before making a decision.
To support financial planning and empower your investment decisions, here are the latest Fixed Deposit interest rates covering various types of Fixed Deposits:
● Economic factors: Monetary policy and economic growth directly influence FD rates. These rates typically fluctuate when contractionary monetary policies are implemented or during periods of strong economic growth.
● Credit rating: The bank’s creditworthiness also impacts its Fixed Deposit interest rates. Usually, banks with higher credit ratings offer more competitive and higher rates.
● FD specifics: Deposit amount, tenure and type can affect the Fixed Deposit interest rates offered. For example- a larger deposit or an extended tenure may offer better interest rates.
● Inflation rate: During periods of high inflation rates, banks typically increase Fixed Deposit interest rates to draw in customers to invest their money.
● Bank’s liquidity: Banks with excess liquidity often reduce FD rates as they face less pressure to attract deposits.
➢ Increased flexibility: Many banks offer flexible FD tenure options, ranging from 6 months to 10 years, providing greater flexibility. Plus, some financial institutions also allow you to withdraw a portion of your funds while keeping the rest invested.
➢ Digital and Auto FDs: Another notable trend is the emergence of Digital and Auto FDs. Thanks to digitisation, investors can now open and manage their FDs online with 24/7 access.
On the other hand, Auto Fixed Deposits bring a new level of convenience by enabling you to link your existing Savings Account to your FD. This facilitates the automatic transfer of funds, making it an attractive option for busy investors or those who prefer a hands-off approach.
➢ Benefits for senior citizens: Many banks offer special FD schemes catering to the unique needs of senior citizens. These schemes provide higher Fixed Deposit interest rates than regular FDs along with other exclusive benefits, such as loans against FD, low minimal investment requirements and tenures ranging from 7 days to 10 years. This extra income can be a lifesaver for seniors, allowing them to cover their everyday expenses and stay financially secure easily.
Investing in Fixed Deposits is a low-risk, high-reward strategy that can help you achieve your financial goals, whether it is saving for a big purchase, building an emergency fund or growing your wealth over time.
With the right knowledge of Fixed Deposit interest rates and trends, you are now empowered to make smart investment choices that drive growth and security.
Disclaimer: This article is published in association with Axis Bank and not created by TNM Editorial.