Deciding to invest and choosing the right investment instrument is on an equal footing nowadays. Making suitable investments takes you closer to achieving your goals and assures financial security. Hence, you should actively invest. When it comes to choosing a good investment instrument, several options exist.
A Fixed Deposit is the finest investment to consider strongly. It is a simple, secure instrument that earns you decent interest returns. You need to make a significant one-time investment. You can opt for flexible tenure and reap good returns.
Have a mix of Cumulative and Non-Cumulative FDs
There are two FD options to choose from: Cumulative and Non-Cumulative. With the Cumulative FD, your interest earnings are clubbed with your principal investment. This allows you to benefit from the power of compounding and reap higher returns. Under Non-Cumulative FD, you receive the interest earnings periodically. It can be monthly or quarterly. You should consider having both in your investment portfolio.
With Cumulative FDs, you can earn higher interest returns. At the same time, you can use the interest income from Non-Cumulative FDs to meet your daily expenses. Whatever type you wish to invest in, you can do it through the Banking App. It is a one-stop solution for your banking and investment needs.
Adopt the laddering strategy
A laddering strategy is the smartest way to invest in FDs. It earns you good returns, and you can enjoy high liquidity. Here, you need not make FD Investment but split it into multiple deposits. For instance, you have Rs. 20 lakh in your hand. Instead of making a single FD Investment worth Rs. 20 lakh, you split the amount and make five FD Investments worth Rs. 4 lakh.
So, a financial requirement of Rs. 3 lakh comes up. You need not break a large FD to meet the requirements. You can break one of your FDs valued at Rs. 4 lakh to meet your requirement. This way, your need is met, and your other deposits remains intact, earning you interest. Another way to ladder your FD is to opt for different tenures.
You should consider your financial requirements to decide this. Generally, having all three tenures in your portfolio is best: small, mid, and long-term FDs.
Invest with both banks and NBFCs
FDs are a standard investment option that almost every leading bank offers. Their FD rates are likely to differ. Generally, NBFCs are popular for providing a higher interest rate. You should consider investing in them both through banks and NBFCs. This way, you benefit from high-interest rates from both financial institutions.
