FD is a popular means of investment even today. People who like safe investments include FD in their portfolios. You get options from 7 days to 10 years to invest in FD. The interests of all are also different. If you want to do many FDs, then you can fix the money according to different tenures. But if you have to do only 1 or 2 FDs and you are confused thinking about which FD will prove better for you in terms of profit, then know about it here.

What should be done?

The problem with short-term FDs is that banks do not offer very good interest rates and even if they do, then due to the short tenure, you do not get much benefit. On the other hand, if you invest money in a long-term FD of 5 to 10 years, then the question remains in mind if the interest rate of FD increases in between, then you will not be able to get its benefit. In such a situation, it is best that you invest in a mid-term FD whose tenure is 2-3 years.

Very good interest rates are being offered in many banks on mid-term FD. The tenure in this is neither too short nor too long. Therefore, your money does not get stuck for a very long time and you do not miss any opportunity for a better investment. On the other hand, if you have more money and you want to invest it in FD, then you can invest money in FDs of different tenures such as short-term, mid-term and long-term (up to 5 years). If you want to invest money only in long-term FD, then invest only when you know very well that the interest rates are at their highest level at this time.

Where is how much interest available in mid-term FD?

In SBI, common people are getting 7% interest and senior citizens are getting 7.5% interest on FDs of 2 to 3 years.

In PNB, common people are getting 7% interest senior citizens are getting 7.5% interest and super senior citizens are getting 7.8% interest on FDs of 2 to 3 years.

In Canara Bank, common people are getting 7.3% interest senior citizens are getting 7.8% interest and super senior citizens are getting 7.8% interest on FDs of 2 to 3 years.

In HDFC, common people are getting 7.35% interest and senior citizens are getting 7.85% interest on FDs of 2 years 11 months to 35 months.
In ICICI Bank, common people are getting 7.25% interest and senior citizens are getting 7.75% interest on FDs of 18 months to 2 years. On the other hand, common people are getting 7% interest and senior citizens are getting 7.5% interest on FDs of 2 years 1 day to 5 years.

Understand the benefits of investing in FD.

Your investment is considered safe and you get guaranteed returns.
You get the facility of loan on FD. In such a situation, if you need money in between, then instead of breaking the FD, you can manage by taking a loan on it.
Bank FDs get insurance coverage of the Deposit Insurance and Credit Guarantee Corporation (DICGC). If your bank defaults or goes bankrupt, then you will get up to 5 lakh rupees under this insurance cover. That is, your deposit of up to 5 lakh in the bank is secure.
If you make FD for 5 years or more, you can claim tax exemption under Section 80C of the Income Tax Act-1961. This is called Tax Free FD.

Also, know the drawbacks of FD.

In terms of returns, you can get better options than FD. Therefore, FD cannot be called the best option.

Usually, FD has fixed rates, which means that your profit will be calculated with the same interest rate with which you started.

If you break the FD before maturity when you need money, then you have to pay a penalty on it.

The return of FD is not enough to beat inflation. The interest you get on FD of less than 5 years comes under the purview of tax.

Disclaimer: This content has been sourced and edited from ZEE Business Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.