Fixed deposits or FDs have always been one of the most popular and consistent investment options in India. Yes, fixed deposits have been able to rule the roost for investors because market performance or fluctuations do not govern the return of an FD.

It means that an investor is bound to get a fixed interest over a tenor while investing with a service provider. Senior citizens are the investors who top the profit margins since they get around 8.10% as returns.

However, despite the mentioned benefits that an FD investment provides, some people still consider fixed deposits as a viable investment source to return a good dividend.

If you are one of those people who doesn’t think FDs are good to invest, it’s time to rethink. Let’s provide you five easy steps that will propel your FD investment to land you a decent chunk of bonuses or income.

• Go for investments with an extended tenor

When it comes to reaping more out of your fixed deposits, the first thing that’s advisable is investing for a longer maturity and get higher ROI when pitted against short-term plans. Banks and NBFCs always offer a better deal on FD interest rates if you decide to keep or lock your money for a period ranging from 2-5 years when compared to some months.

• Analyze the market, always!

Make sure to analyze the market conditions before investing in a fixed deposit scheme. If you are sure that the interest rates will go up in the future, it’s better to opt for a shorter maturity period (12-18 months). Why? You can do it and withdraw the money and reinvest in a new FD scheme and enjoy a bigger return. What’s more, the opposite is also true. If you are not an expert in analyzing the market, take the guidance of a noted financial adviser to help you out.

• Spread out the Investments

If you have plans to invest money of more than Rs.1 lakh, don’t think much and open more than one FD accounts with a leading bank or a non-banking finance company (NBFC). In case, if you have to close the FDs prematurely, you won’t cough up much penalty charges. Splitting the accounts can also help with some considerable tax saving. Yes, if your earned interest reaches the figure of Rs.10,000, you will need to put down 10% as TDS. Thus, splitting the FDs can assist you to keep the return lesser than Rs.10,000 and keep off from taxation.

• Go for attractive FD schemes of top banks and NBFCs

Look out or wait for some festive time when banks and NBFCs offer you more benefits or features in an FD scheme. Time your investments in such a way that it gives you maximum profits with minimal efforts.

• Reinvest

Did you know that leading non-banking finance companies (NBFCs) offer you a higher rate of interest when your existing fixed deposits mature? Example – if had invested in a senior citizen fixed deposit scheme with a top NBFC at an interest rate of 8.10%, and if it’s about to mature, you could reinvest it because it will fetch you 8.20% interest gains now. Thus, reinvesting is another sure-shot method to maximize you FD returns. Ask your lender how much can they offer you if you want to reinvest to know more.

The Bottom Line

You just read some of the proven and time-tested ways to push your fixed deposits to earn even more. Have a relook, analyze your case and think which one fits you! All the best!