How to Select the Best Fixed Deposit Plan?

  • Deposit
  • 21 Days ago

Written by - Shriram

A Fixed Deposit (FD) is a secure investment option in which you get assured returns. You can choose the best-fixed deposit plan by assessing factors like interest rates and the credibility of the deposit. Starting an FD is simple; you don't have to track the market fluctuations as the interest rate is fixed for your selected tenure.

A fixed deposit is a useful investment opportunity through which you can save your hard-earned money securely and get assured returns. To start a fixed deposit, you need to have a lump sum of money that you can put away for some time. You will earn interest on this lump sum upon maturity with an FD. It is easy to start a fixed deposit, and you can book one at any bank or Non-Banking Financial Company (NBFC) of your choice.

With Shriram, you can invest in an FD through a simple process and get the best interest rates for your deposits. The process is cut short if you have access to a net banking account and can open an FD in just a few clicks. Let's look at an FD and the types of FD schemes that would be best for you.

What is a Fixed Deposit?

A fixed deposit is a savings scheme that helps you save money most securely. You can get assured returns on your investment with an interest rate that depends on the tenure of the deposit and the amount you are investing in. Visit the Shriram website to check the interest rates for the type of deposit you need.

What is the Eligibility to Open a Fixed Deposit?

It is effortless to open a fixed deposit account. Listed below are the documents required and the eligibility criteria to apply for an FD:
 
  • You need to check the minimum investment amount for the bank or NBFC of your choice to see if you have the finances to apply for an FD.
 
  • You need to be an Indian citizen residing in India. However, Non-Residential External (NRE) and Non-Resident Ordinary (NRO) FDs are also available for individuals outside India.
 
  • You must submit identity proof like a passport, Aadhaar card, PAN (Personal Account Number) Card, Voter ID, or any other government-approved identification.
 
  • Address proof is also required. Telephone bill, electricity bill, bank statement with cheque, or any other document that has your address proof can be submitted to apply for a fixed deposit.

Factors to Consider while Selecting an FD

  • Select a bank or NBFC that offers at least 5% interest rates

In the past few years, the economy has seen a lot of ups and downs. Selecting a financial institution offering at least 5% interest on a basic FD account is wise. Going below this amount is not very good for the future when you need to invest in a new FD or want to re-invest a previous deposit that matured. With a Shriram Fixed Deposit, you can earn interest on your FD up to 8.40% per annum, including the additional interest rate of 0.50% per annum for a senior citizen FD scheme.
 
  • Check the credibility of the financial institution

If you choose to invest with a corporate or an NBFC, you need to check their credibility before investing your savings with them. You can do this by examining the fixed deposits' safety ratings. Shriram Fixed Deposit comes with an FD rating of "[ICRA]AA+ (Stable)" by ICRA and Rated "IND AA+/Stable" by India Ratings and Research (A high degree of safety), which indicates high credit quality.
 
  • Choose between cumulative and non-cumulative FDs

Depending on your deposit size and income, you can choose between a cumulative and a non-cumulative FD. With a non-cumulative fixed deposit, you can earn monthly, quarterly, half-yearly or yearly interest. You will only get your interest with the principal amount upon maturity with a cumulative FD. Shriram Finance offers both cumulative and non-cumulative FDs for your convenience.
 
  • Ensure the bank or NBFC has an easy application process

The process of application varies for every bank or financial institution. The online process is the fastest way to open an FD. However, not every institution provides online facilities and demands you visit the branch to start a new fixed deposit. But if you do not have access to net banking, you can always go to the bank and submit the required documents to open a new FD account. A Shriram fixed deposit can be opened online from the convenience of your home.
 
  • Rate of penalty

The final important factor to consider is the rate of penalty, which is only chargeable upon premature withdrawal. You may need to withdraw the FD amount in the case of an emergency, and that is why it is imperative to keep updated on the penalty charges on your FD. The penalty can vary with the financial institution, so ensure you check the penalty before investing.
 

Features and Benefits of an FD

The interest rate for an FD account is higher than a regular savings account. Apart from this benefit, many great features make fixed deposits one of the best investment opportunities. Let's explore why an FD is a popular investment option:
 
  • Safe and steady returns
The interest rate on your FD is fixed and is not impacted by market fluctuations. This means you will get assured returns and can earn interest on your FD until maturity.
 
  • Easy withdrawal
In the case of any financial emergency, you can always withdraw the FD amount easily. The process for withdrawal is quick, but you may have to pay the penalty for premature withdrawal.
 
  • Loan against FD
You can mortgage your FD in case you need a loan. You can use up to 90% of the FD as collateral to take the loan. Every bank or NBFC has their terms and conditions for the same.
 
  • Tax-saving benefit
You can claim an FD in your taxes by investing in a tax-saving FD. This FD has a fixed tenure of 5 years and does not need special eligibility to apply.
 
  • One-time effort
Once you have invested in a fixed deposit, you do not need to keep checking the market to understand how your investment is performing. In this way, people new to investing can carry on with their lives without worrying about the 'FD's stability. With a Shriram FD, you can apply for auto-renewals and auto-withdrawals on your deposits.

Conclusion

There are many factors to consider before selecting the perfect fixed deposit for your investment. You can make the most of your money by choosing a suitable scheme. One more thing you need to ensure is that your investment plan aligns with your financial goals. This way, you can stay tension-free after investing your money and watch it grow securely over time.

Open a Shriram Fixed Deposit to achieve your financial goals and reinforce your saving habit. You can get high-interest rates of up to 8.40% per annum, including an additional 0.50% for senior citizens. Visit the Shriram now to know all the benefits you can get with your fixed deposit.

FAQs

1. Which is the best fixed-deposit plan?

While a regular FD will give you high-interest rates and assures returns, you can invest in a tax-saving deposit to avoid deductions on your investment. However, the best FD for your money will be decided based on factors that impact your investment. Shriram offers one of the highest interest rates for a fixed deposit investment. You can use the Shriram FD calculator to know the exact pay-out you can get on a deposit.

2. How many years will the FD take to double?

You can use the Shriram FD calculator to check how much time it will take for your investment to double.

3. Can I get monthly interest on FD?

Yes, with a non-cumulative FD, you can earn interest monthly or quarterly or semi-quarterly or yearly interest on your fixed deposit.

4. What is the interest rate of Shriram Finance in FD?

With a Shriram FD, you can get interest rates up to 8.40% per annum, including an extra 0.50% interest for senior citizens. You can check the interest rates on the Shriram site to know how much interest you can get on your deposit.

Key Highlights:

  • You can choose the best-fixed deposit plan by assessing factors like interest rates and the credibility of the deposit.
 
  • You can get safe and steady returns through a fixed deposit investment.
 
  • Investing in an FD is a one-time effort because you won't have to check the market to see how your investment is doing.
 
  • With a non-cumulative FD, you can earn a monthly income through your investment.