Types of Fixed Deposit: 5 Ways to Choose the Right FD



Fixed deposits (FDs) are one of the safest investment options available. They offer guaranteed returns and are easy to understand. With different types of FDs available, choosing the right one can be challenging. Understand the five ways to choose the right FD, using the options available on Bajaj Markets.

  1. Understand the Types of Fixed Deposits

There are several types of fixed deposits. Each type caters to different needs. The main types include:

  • Regular Fixed Deposits

These are the most common. They offer fixed interest rates and a predetermined tenor.

  • Tax-Saving Fixed Deposits

These come with a lock-in period of five years. They offer tax benefits under Section 80C of the Income Tax Act, 1961.

  • Cumulative Fixed Deposits

Interest is compounded and paid at maturity.

  • Non-Cumulative Fixed Deposits

Interest is paid at regular intervals, such as monthly, quarterly, or annually.

  • Senior Citizen Fixed Deposits

These offer higher interest rates for individuals above 60 years.

Knowing these types helps you match your investment goals with the right FD.

  1. Consider the Interest Rates

Interest rates vary across different FDs and banks. Higher interest rates mean better returns. Compare the rates offered by various banks and NBFCs. Bajaj Markets provides a platform to compare interest rates from different issuers. Always opt for FDs with competitive rates to maximise your returns.

  1. Evaluate the Tenor


FDs come with different tenors ranging from a few months to several years. Your financial goals and liquidity needs should determine the tenor. For short-term needs, choose FDs with shorter tenors. For long-term goals, opt for longer tenors.

  1. Check for Flexibility

Some FDs allow premature withdrawal or loans against the deposit. These features provide liquidity in case of emergencies. However, premature withdrawal might attract penalties or lower interest rates. It’s essential to read the terms and conditions.

  1. Look for Special Features and Benefits

Most issuers offer additional features with FDs. These can include auto-renewal, overdraft facilities, and higher interest rates for seniors. Some FDs also come with insurance cover. Special schemes might offer better returns or added benefits.

Choosing the right fixed deposit involves several key steps. Understand the types, compare interest rates, and evaluate tenors. Check for flexibility and look for special features. Bajaj Markets lets you compare various fixed deposits to find the best one. By considering these factors, you can ensure a safe investment with optimal returns.

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