Always Consider Several Fixed Deposits Before Finalizing

  • Added:
    Mar 04, 2014
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Always Consider Several Fixed Deposits Before Finalizing Photo by Aishwarya Mahurkar

Many people often make the decision to transfer their funds from a savings or current accounts into a fixed deposit. While this is done to ensure a degree of financial security, most investors are unaware of other potential gains and benefits that different financial partners may offer. Any financial expert in this day and age will strongly suggest that you research several options as well as financial partners before investing in a fixed deposit. So, what are the potential factors that need to be considered before finalizing the best option?

The interest rate is the first and the most important factor. It may seem like most banks and financial organizations have similar rates but the difference can significantly impact how much you have to pay. While there is no real way to pinpoint the fixed deposit account with the best interest rate , there are a few options that you should look into. Some organizations provide an alternative wherein you can re-invest the interest received along with the principle amount to earn compound interest rates. If your FD has sufficient principal amount, however, you can opt for a monthly interest instead. Users can then re-invest that monthly interest in recurring deposits or SIP (Systematic Investment Plan) to increase their returns considerably. Both these strategies merit consideration while you decide which fixed deposit scheme and financial partner to opt for.

Another factor that you need to look into is how your financial partner intends to support you. Will you be able to take a loan against that amount?  How quickly can you get premature or partial withdrawals? How much does it cost for premature withdrawals? How do they renew their FDs? While these factors may not affect your final decision, they certainly could make your operations easier. If you find a number of organizations with similar FD interest rates, it might be advisable to opt for the one that caters well to the customers. A customer-friendly organization is definitely a better choice in the long run as they will incorporate better services and user-friendly technology in their operations.

The most important factor is the ease of operation. You should always look at a bank or financial organization with online operations as it becomes easier to open and operate a fixed deposit account . While this may seem to be a basic consideration, it could come in very handy when you least expect it. If you can, for example, withdraw a partial amount from your FD during non-banking hours, it could be a great add-on in case of financial and medical emergencies. These factors basically improve the liquidity of this financial investment without affecting safety. You can also save travel time and expenses while using the same. Online services also ensure that you can open an account in any branch in the city much more easily.

While these factors may seem simple on the surface, it is important to carefully evaluate the same before selecting the right financial investment for you. You may even opt for a different banking institution from your original choice once you’ve completed your research. Isn’t it a worthwhile choice, though, if you can earn more and invest easily?

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An experienced writer on finance topics, the author articulates of investment choices such as fixed deposit account & recurring deposit schemes. She writes about a variety of topics including the benefits of recurring & best part of the fixed deposit schemes and how to make the right investment choice.

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