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Steps To Earn Higher Interest From Fixed Deposits

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The scenario of today’s economy is steady and shows the minimal scope of growth in the coming future. Because of high inflation, the returns from investments are not up to the mark. All the investment avenues fetching a fixed rate of interest are affected the most. Due to high inflation, the adjusted return is way less than it has to be. Fixed deposits are one of those avenues.

Steps To Earn Higher Interest From Fixed Deposits

You can follow these steps to earn higher interest on fixed deposits:

Open fixed deposits account online:

If the customer opens an account online, he is expected to get a higher rate of interest on the deposit than opening a report from the branch. For example, Mahindra finance guarantees an interest of 8.75% per annum if opened the report from the branch. Still, if the same account is opened online, then the financial institution guarantees an interest of 9% per annum.

Eye on company deposits:

It would help if you looked for deposits of the companies which are AAA rated by the credit rating agencies for security of the deposit and guaranteed interest. For example, SBI offers an interest of 7.5% per annum, Mahindra finance can go to 9%, and Bajaj FinServ can secure interest of 8.75%. The rate of interest is different because of the rating of the company.

Form 15G and 15F:

TDS, i.e., tax deducted at source, is a form of tax that the investor would pay from the source of income. The source of income here is the investment; thus, the amount of interest received by the individual will be liable for the TDS, which can be avoided if the investors fill the Form 15G and 15F. This form states that the income from the investment should not be taxed as it is under the income tax bracket prescribed by the income tax act, 1961. If the investor is liable to pay tax, then he should not fill the form mentioned above.

Apply for cumulative deposits:

Cumulative deposits tend to compound the interest. Fixed deposits do not allow compounding of interest. The compounding effect of interest would ensure higher returns in the future or at the end of term-end.

Do not withdraw from the fixed deposit before the maturity:

Fixed deposits are for a stipulated period, and no withdrawals are allowed before the maturity if done, then the bank charges fees, charges, penalties. Usually, banks levy a penalty of 1% for early withdrawal before maturity. ThuSteps To Earn Higher Interest on fixed deposit investment plan.

The scenario of today’s economy is steady and shows the minimal scope of growth in the coming future. Because of high inflation, the returns from investments are not up to the mark. All the investment avenues fetching a fixed rate of interest are affected the most. Due to high inflation, the adjusted return is way less than it has to be. Fixed deposits are one of those avenues.

You can follow these steps to earn higher interest on fixed deposits:

Open fixed deposits account online:

If the customer opens an account online, he is expected to get a higher rate of interest on the deposit than opening an account from the branch. For example, Mahindra finance guarantees an interest of 8.75% per annum if opened the account from the branch, but if the same account is opened online, then the financial institution guarantees an interest of 9% per annum.

Eye on company deposits:

You should look for deposits of the companies which are AAA rated by the credit rating agencies for security of the deposit and guaranteed interest. For example, SBI offers an interest of 7.5% per annum, Mahindra finance can go to 9%, and Bajaj FinServ can guarantee an interest of 8.75%. The rate of interest is different because of the rating of the company.

Form 15G and 15F:

TDS i.e., tax deducted at source, is a form of tax that the investor would pay from the source of income. The source of income here is the investment; thus, the amount of interest received by the individual will be liable for the TDS, which can be avoided if the investors fill the Form 15G and 15F. This form states that the income from the investment should not be taxed as it is under the income tax bracket prescribed by the income tax act, 1961. If the investor is liable to pay tax, then he should not fill the form mentioned above.

Apply for cumulative deposits:

Cumulative deposits tend to compound the interest. Fixed deposits do not allow compounding of interest. The compounding effect of interest would ensure higher returns in the future or at the end of term-end.

Do not withdraw from the fixed deposit before the maturity:

Fixed deposits are for a stipulated period, and no withdrawals are allowed before the maturity if done, then the bank charges fees, charges, penalties. Usually, banks levy a penalty of 1% for early withdrawal before maturity. Thus, bankers do not appreciate a fixed deposit for a longer period, and they advise to renew it every year so that if the investor needs money in any kind of contingency, he may not have any problem at that time.

Place deposit in the name of parents:

Senior citizens get a higher rate of interest on deposits. For example, if you are eligible for a 7% interest per annum, the senior citizens are eligible for 0.5% more than what you are receiving i.e., 7.5%.

Fixed deposit interest rates by different banks

BANK
TENURE
INTEREST RATE (%)
SBI
7 days to10 years
5.75 to 6.85
ICICI
7 days to10 years
4 to 7.25
PUNJAB NATIONAL BANK
7 days to10 years
5.7 to 6.85
HDFC
7 days to10 years
3.5 to 7.4
AXIS
7 days to10 years
3.5 to 7.25
UNION BANK OF INDIA
7 days to10 years
5 to 6.85

All the banks have different interest rates for different tenure. Thus, the investor should make sure that wherever he/she is investing, it should be higher than his peers.

Types of fixed deposits to invest your money:

Standard fixed deposits:

These are simple fixed deposits. Investors will invest a lump sum amount for a stipulated period and would not withdraw before maturity.

Special fixed deposits:

To earn higher interest, the investor should go for special fixed deposits. The higher amount is invested in fixed deposits. For these types of fixed deposits, investors take a loan to fulfill the minimum requirement.

Tax-saver fixed deposits:

If you want regular returns monthly after the maturity, then go for tax-saver fixed deposits.

We hope that these points were helpful for you.

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