Fixed deposit rates on a rising scale

A few weeks back it was decided by banks that they would reduce their fixed deposit rates in order to escalate the CRR i.e the base rate, which is the minimum lending rate. But now the banks have put their decision of cutting down on deposits.

In fact, fixed deposit rates have increased and even public banks in their recent notice to the stock exchange have declared their decision of revising the fixed deposit rates.
As per the amendments, the following changes were made:
• Fixed deposit rates will be increased from 8% to 8.25% per year for fixed deposits of 151-179 days and 180-269 days respectively
• Fixed deposit rates for 1-2 years deposits will increase from 8.75% to 9%
• Fixed deposit rates for NRE deposits will increase by 0.25% for a deposit of 1-2 years.

Summary: With a hike in fixed deposit rates, people have started investing more in fixed deposit.

Types of Fixed Deposits

Types of Fixed Deposits
As the name suggests, a fixed deposit (FD) is a fixed sum of money that is in custody in an FD account for a pre-determined time period earning fixed deposit rates. The tenure for a fixed deposit ranges from 15 days to 3 years and the fixed deposit rates vary between 3 % and 7.5. The time period of an FD may be extended up to 10 years as per the requirement of the depositor. A FD account normally yields greater fixed deposit rates than a standard account, because of its fixed period of time. FDs are also known as term or time deposits. FDs can be classified as:
• Certificate of Deposit
• Revolving Bank Term Deposit
• Unchanging Term Deposit
• Holiday Account

Certificate of Deposit (CD)
A CD is a kind of fixed deposit account that can be bought in varying sums from a traditional bank, credit union, or other depository organization. A Certificate of Deposit is a commercial document that substantiates the financial value of the deposit made; its date of maturity and the rate of interest are valid on the sum loaned. The maturity period of a CD ranges from one month to five years. Interest rates accumulated on CD are quoted on a yearly basis.

Revolving Bank Term Deposit
This deposit renovates itself mechanically for another period of the same length subsequent to the expiry of its loan period. Investors can deposit money into a revolving term account via a cashless transfer by direct transfer or from an existing account. The period of this deposit varies from one week to one year.

Unchanging Term Deposit
This deposit account is also called as a single term deposit, and it does not renovate automatically following its date of maturity. An unchanging FD can be opened with a maturity period that ranges from one month to 36 months.

Holiday Account
The other name of a holiday account is the Christmas club account, which is a special category of fixed term deposit that permits a depositor to save, and put in, small denomination money until the account matures. Money cannot be taken out of the account until it reaches the date of maturity.

Summary: Choosing the type of FD account depends upon the requirement of the depositor.

Advantages Of Fixed Deposit Calculator

There are huge numbers of accounts that can be opened in various banks; one of them is the fixed deposit account. With a growing number of banks, their rate of interest, it is important to choose the right bank that will give you good returns on your fixed deposit account. And that is why it is essential to take the help of a fixed deposit calculator.

The fixed deposit calculator would ask you to fill some simple details like how much amount do you want to invest, tenure of the account, the rate of interest and the maturity period. Based on the details that you fill fixed deposit calculator will give you an indicative figure of your investment.

The fixed deposit calculator can be used for all private or nationalized banks; the need is to make the most out of it so that you get the right bank for your investment.

Summary: Fixed deposit calculator is a great source of information when it comes to opening a fixed deposit account. It will help you to choose the right bank with maximum returns

Remember to Check The Fixed Deposit Rates Before Investing In Fixed Deposit

In today’s India, fixed deposit is considered as a very popular mode of savings. Fixed deposit investments not only ensure the safety and security of your money and also enable you to use your money at a time when you need it the most. Since the fixed deposit rates are much higher in comparison to other form of investment, people tend to prefer putting their money into fixed deposits. The chances of people getting attracted towards the fixed deposits grow, provided the banks offer higher interest rates on fixed deposits. As fixed deposits involve making investments for fixed tenure, it helps depositors keep their funds safe and secure and enable them to grow more with dint of rate of interest offered. 

With interest rates reaching around 8 to 9 % per annum (more towards the upper end) fixed deposit rates that Indian banks offer have become turned out to be more lucrative nowadays. In comparison to other investments, these deposits yield a higher return for the reason that you are investing your money for a specific tenure in a fixed deposit. As fixed deposit are considered more secure, there is more likely to be a preference for fixed deposits especially in a period of economic uncertainty, 

The returns on investments are higher in fixed deposits than other forms of deposits. Depending upon the bank in which the deposit is made, the interest is commonly received on a quarterly, half-yearly or even annually. The fixed deposit rates increase in direct proportion to term of a fixed-deposit account, longer term deposit would yield higher rate. As a case with most of the banks, senior citizens upon retirement get higher interest rates. It makes fixed deposits a popular retirement option. Depending on the loan amount and the tenure of deposit, the fixed deposit rates may be variable. Therefore, due to the highest return on maturity, fixed deposit is considered as a very lucrative form of investment.

Summary:

Make sure you have checked the fixed deposit rates before applying for it if you are considering fixed deposit as the safest investment option. These interest rates help in determining the limit of investments this type of deposit can attract.