5 Tips to Make the Most of Your Fixed Deposits

For risk-averse investors who want to protect their money from any kind of market instability, fixed deposits (FDs) are the safe of choice. Although fixed deposits offer a lower income than other investment options with a greater exposure to equities, one of the key factors influencing individuals to pick FDs is that they are risk-free.

Search Online Fixed Deposit Accounts

Nowadays, if you open a fixed deposit online, certain banks will give you a bonus interest rate. It is now feasible to open any type of bank account remotely without having to go to the bank branch as consumers become more accustomed to using internet banking. You can examine the interest rates on fixed deposits given by several banks online and select the one with the best interest rate.


5 Tips to Make the Most of Your Fixed Deposits


Company Deposits

Bonds with triple-A (AAA) ratings and corporate deposits pay greater interest rates than bank deposits. Investment-grade debt bonds with a high level of creditworthiness and the best ability to repay investors are given AAA ratings by the credit rating agencies. Consequently, they are just as secure as bank fixed deposits.

Submit form 15G and 15H

To ensure that TDS is not taken from your return and that it is safe, you can file forms 15G and 15H if you do not have taxable income. However, take notice that this form is intended for individuals who fall under the tax-exempt category and have a net annual income of not more than 2.5 lakh. The tax agency is informed not to deduct TDS because your income is below the taxable threshold using the forms 15G and 15H. Make sure not to submit the form if you belong to the group with taxable income.

Cumulative Deposits

Compound interest is advantageous when you invest in cumulative deposits. Banks typically compound interest every three months, but corporate fixed deposits do not. You can eventually earn bigger yields thanks to the power of compounding. However, you must disregard additional factors like safety, liquidity, etc.

Place Deposit in Name of Parents

The majority of banks increase fixed deposit interest rates for senior persons by 0.50 percent. You can open fixed deposits in your parents' names if they do not have taxable income. Avoid doing so, though, if they fall into a higher income tax rate.



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