Fixed deposits are stable investment options that provide steady returns over a period. While you may already be choosing an FD with a high rate of interest, there are ways of boosting your returns by implementing smart strategies. To help you do just this, here are 5 tips:
1. Develop a sound reinvestment plan:
Simply investing in an FD cannot guarantee you high returns. It is important to pay attention to the management of the FD as well. For example, once your FD reaches the maturity date, consider re-investing. Numerous financial institutions offer higher rates of interest to you if you plan to renew your investment. If you do not want to manage the account, you can also ask your lender to automatically renew your account at maturity.
2. Choose company FDs for higher interest:
Company FDs offer you a high interest rate, with additional rate of interest on Senior Citizens Fixed Deposit. This can help you build your wealth for retirement or various other purposes like financing your children’s education. Increase your savings by investing in a Fixed Deposit with Bajaj Finance. Here you can avail various benefits like attractive rate of interest, online application, flexible tenors, and online account management.
3. File your returns on time and be aware of new tax exemptions:
The recent changes in the Union Budget have led to several modifications in the tax laws for FD returns. If you file your returns with the forms 15H or 15G you can avail a tax exemption. You can also receive tax exemption if you fall in a low-income bracket.
Interest earnings below Rs. 50,000 is except from tax for senior citizens with a bank FD and below Rs. 5,000 for those with a company FD. It is important to be aware of these tax rules so that you can manage your FDs accordingly.
4. Select a cumulative FD over a non-cumulative FD:
While non-cumulative FDs are ideal for you if you want regular pay-outs, cumulative FDs are ideal for providing your corpus better growth over the tenor. In a cumulative FD, you are paid the funds only at the end of tenor. This can help ensure that your corpus continues to compound until maturity.
5. Try laddering your FD investment for more liquidity and tax benefit:
Laddering your FD can help you make the best use of your funds. You can divide a single corpus over multiple FDs with different tenors. This helps you have some FDs as financial back-up in case you need to fulfil any financial goals. Laddering your FD also enables you to have multiple maturity dates, which means that you can time your FDs to mature before and after March 31st, so that you can gain from tax benefits.
These are some strategies that you can implement to maximise the gains from your FD Scheme and reduce the deductions. However, to ensure the highest earnings, ensure you do your research and select an FD with a financial company that offers you an attractive rate of interest.
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