digitalbankingindia

[digitalbankingindia]

How to maximise your FD Investment returns?

Fixed Deposits provide a means of safeguarding your principal investment amount. Your financial portfolio looks complete with the presence of FDs. If your portfolio involves FDs, you always have a liquidity provision. Besides that, you can avoid performing withdrawals from your Equity Investment when markets are performing poorly and give them the space they need to grow. Here are other ways to maximise your FD Investments:

Multiple FD scheme investment

Numerous investments across different Fixed Deposit schemes help gain better liquidity. It also offers you consistently profitable returns. Consider breaking your assets into various schemes and different investment tenures. This builds a ladder of investment, and you can make the most out of the invested amount.

Plan investments

Besides investing in FDs, you should also understand how to manage your deposit. Once your deposit reaches maturity, you can re-invest, primarily because different banks offer higher interest rates on renewing investments.

Invest in Fixed Deposits online

Several banks provide higher interest rates to those who invest in FDs online. So, whenever you wish to invest in a Fixed Deposit Account, you can ask your preferred bank or company if they offer a higher interest rate when investing online.

Invest in Corporate FDs with high credit ratings

Corporate FDs are a great option to invest in Term Deposits. Many Corporate Deposits offer higher interest rates than Bank Deposits. However, select a known Corporate FD with an AAA credit rating. Do research by checking the interest rates they have been offering for years.

Hold FDs under your parent’s name

Several banks provide high-interest rates to senior citizens. So, you can research your preferred banks and opt for the one that offers the most profitable interest on FD. This way, you can grab high-interest rates and make a profit.

Opt for Cumulative FDs

Cumulative FD lets you build your corpus over the tenure as you get additional benefits of compounding interest. However, Non-Cumulative FD helps gain regular payouts, making them perfectly suitable for retired individuals seeking periodic income.

File returns on time

It is crucial to file your returns consistently and be cautious about the latest changes in the tax laws for FD returns. You can also avail of tax exemptions if you have filed your returns correctly.

Conclusion

These simple yet powerful steps can help maximise your FD Investments. However, be mindful regarding the FDs you choose as only the right one can bring you profitable returns. You can calculate your maturity amount even before investing through an FD calculator.

[digitalbankingindia]

Why should senior citizens invest in Fixed Deposits?

Fixed Deposits are a safe and known investment choice for senior citizens because they provide guaranteed returns and are authorised by the government. Senior citizens are considered low-risk investors, so banks offer higher interest rates on FDs. They are beneficial for senior citizens for several reasons. Here are reasons why senior citizens should open a Fixed Deposit for investments:

High returns and interest rates

Generally, FD offers senior citizens a higher interest rate than regular investors. Besides that, they can also opt for an auto-renewal facility while opening an FD. This assists in proceeding maturity while it is getting reinvested. Hence, the returns multiply.

Financial assistance

Senior citizens might have other financial expenditures besides meeting daily expenses as a retiree. For instance, hosting a wedding, property purchase, Loan repayment, etc. Hence, senior citizens can count on their FD to pay their expenses over varying tenures once aligned. This helps them handle their needs with ease.

Emergency assistance

Emergencies can arise anytime in our lives. For senior citizens, these come as medical treatments. FDs can be helpful as they can act as collateral, and senior citizens can apply for a Personal Loan against them. This way, they can quickly address their emergency and adhere to the investment policies.

Guaranteed returns

Unlike other investments, FDs are not linked to the market. Hence, the interest rate on an FD remains unchanged throughout the tenure, so the returns are assured. They can also quickly determine your returns by using an FD calculator. This will not only ensure guaranteed returns but also help plan the finances.

Easy investment

Senior citizens can invest in an FD through a Banking app without hassle. They need to fill in and submit the form and make the payment. This can be done from the comfort of their home online. They can also visit their nearest branch and invest through their Credit or Debit Cards.

Hassle-free monitoring

As mentioned, FD rates remain unchanged throughout the tenure period, so senior citizens need not monitor the performance of their investments regularly. They can enjoy a hassle-free investment experience by investing online, keeping an eye on the maturity of their assets, availing of doorstep services, and more.

Conclusion

To ensure a financially secure life, senior citizens should consider a Fixed Deposit Account and include it in their investment portfolio. The reasons mentioned make FD a lucrative investment option for senior citizens as it offers safe, secure, and guaranteed returns with zero risk involvement.

[digitalbankingindia]

How do Fixed Deposit calculators benefit investors?

Fixed Deposits are a popular and safe way to grow your savings in India. They offer a fixed interest rate over a predetermined period, making them a preferred choice for risk-averse investors. However, calculating the maturity amount and interest earned on an FD can be complex. This is where FD calculators help. Let us explore how these calculators help investors:

Accurate maturity amount estimation

Fixed Deposit calculators provide account holders with a precise estimate of the maturity amount they can expect at the end of the deposit tenure. By inputting details such as the principal amount, interest rate, and duration, account holders can learn how much their money will grow.

Interest rate comparison

With numerous banks offering FDs at different interest rates, comparing them can be tiring. FD calculators allow users to input the interest rates offered by different banks and instantly see which provides the best returns. This helps account holders make informed decisions to maximise their savings.

Tenure selection made easier

Choosing a suitable tenure for your FD is crucial because it affects the interest earned. An FD calculator helps account holders visualise how different tenures impact their returns. Whether you opt for one or five-year FD, these calculators provide insights into which tenure aligns with your financial objectives.

Flexible investment planning

FD calculators offer flexibility in financial planning. Users can experiment with different principal amounts and tenures to find the combination best suits their financial goals. Whether you want to save for a short- or long-term plan, these calculators can tailor your FD Investment on a Banking app accordingly.

Tax planning

Some FDs, such as Tax-Saving FDs, offer tax advantages under Section 80C of the Income Tax Act. Fixed Deposit calculator helps users determine the tax savings they can enjoy by investing in these instruments.

Tracking earnings

These calculators estimate the maturity amount and break down the interest earned, making it simpler for account holders to track their earnings over time. This transparency helps you stay informed about the growth of your savings.

Understanding compounding frequency

Compounding frequency plays a significant role in FD interest calculations. An FD interest calculator offers options to input various compounding frequencies, such as quarterly, semi-annually, or annually. This allows account holders to see how compounding affects their overall earnings and make decisions accordingly.

Ease of use

FD calculators are user-friendly and readily available on bank websites and other financial platforms. Account holders can access them with a few clicks, making financial planning and decision-making hassle-free.

Conclusion

FDA calculators are invaluable tools for FD holders in India. So, the next time you consider opening an FD or want to assess your existing one, turn to the calculator for a clear and accurate picture of your financial future.

[digitalbankingindia]

Why is it important to add a nominee to Fixed Deposits?

When planning your finances, Fixed Deposits can be a reliable instrument for growing your hard-earned savings. However, an important aspect that people often overlook is adding a nominee to their FD. It is important to have a nominee. Understanding how you can easily manage your FD using modern banking solutions like Online Banking is also important.

Who is a nominee?

A nominee is the person you appoint to receive the benefits of your assets, investments, or financial accounts, including your Fixed Deposit. They act as a safeguard to ensure your family members are protected financially in case something happens to you.

Importance

Adding a nominee to your FD Account ensures the following benefits:

Seamless transitions

In the unfortunate event of the death of the account holder, the nominee appointed by them steps in to claim the FD benefits. Having a nominee ensures a quicker and smoother transition of funds. This, in turn, provides much-needed financial support during difficult times.

Skip legal hassles

Without a nominee, claiming your FD amount can become tedious. Adding a nominee to your Fixed Deposit Account simplifies the process, reducing potential legal challenges for your family.

Financial security for loved ones

A nominee is your way of protecting your family's financial interests. It ensures that the funds from your FD are easily accessible to your loved ones when they need them the most.

Is nomination mandatory?

Just like you need to research and compare the various FD interest rates before opening an FD with a bank, you should preferably add a nominee too. It lets your loved ones receive the accumulated amount. It also keeps them away from legal troubles. However, it is not mandatory.

How to add a nominee?

Today, you can easily add a nominee to your FD Account using modern banking solutions like:

Online Banking platforms

Online Banking platforms provide a secure and efficient way to manage your finances. Hence, you can seamlessly add a nominee to your deposit using them. This way, you need not visit a bank branch to make changes. Instead, you can do so from anywhere and at any time.

Banking Apps

You can easily use a Banking app nowadays to not only open an FD but also manage it. You can add your nominee through the app's user-friendly interface. This ensures you can control your account and beneficiary details right from your phone.

Can you change your nominee?

Yes, you can generally change the nominee in your FD using the app of your chosen financial institution.

Conclusion

Adding a nominee to your FD is a responsible step towards securing your family's financial future. Today, you can readily use Digital Banking to add or manage your nominee details. Remember that nominating a beneficiary shows your commitment to your family's financial well-being and peace of mind.

[digitalbankingindia]

Exploring the advantages of using an online RD calculator

When it comes to financial planning, tools that simplify time-consuming and difficult calculations are a blessing. One such beneficial online tool is a Recurring Deposit or RD calculator. However, this brief guide can be an eye-opener if you are clueless about it and its advantages.

About Recurring Deposits

A Recurring Deposit refers to an investment vehicle offered by many Indian banks. It enables you to deposit a fixed sum regularly over a predetermined period. At the end of the tenure, the total amount and the interest you earn on the sum are paid to you.

Features of RDs

RDs have unique characteristics that make them a popular choice among individuals:

Most banks offer RD Accounts with terms ranging from six months to 10 years. You can select a period based on your financial goals and easily open your RD using the Banking app.

RDs do not need a large initial investment. Some banks let you start with just Rs. 100.

The RD interest rates are fixed at the time of account opening. They also remain constant throughout the RD term. This ensures predictability for your returns.

RDs are considered safe and low-risk investments. They are insured by the DICGC for an amount of up to Rs. 5 lakh.

Overview of an RD Calculator

An online RD Calculator is a digital tool banks and financial websites offer. You can use this simple tool to determine the RD maturity amount based on the following:

Monthly deposit

Your chosen tenure

The interest rates offered by banks

The calculator also displays the interest you will accumulate on your deposit over time. It eliminates the need for manual calculations. It also provides accurate results within seconds.

Benefits of using an RD calculator

The key advantages of using an online Recurring Deposit calculator include the following:

Ease of use

The calculator is readily available online and is easy to use. Just enter the values, and it computes the maturity amount and interest in no time.

Accuracy

Calculating the RD maturity amount requires complex computations. An online calculator does away with that and ensures accurate results. It also prevents the risks of human error.

Comparison

When opening an RD online using the Banking app, you can easily use this calculator to compare. Use combinations of various deposit amounts and tenures to ensure the returns match your financial goals. You can also compare the maturity values of RDs from multiple banks. This empowers you to make better financial decisions.

Conclusion

Using an online RD calculator saves time and effort. It also equips you with the necessary information to maximise your returns and reach your financial aspirations. Regardless of whether you are a seasoned investor or new to the world of RDs, using this tool can be a game-changer.

[digitalbankingindia]

How to secure the best interest rates on Fixed Deposits?

Fixed Deposits, or FDs, are a popular choice when growing your savings. These financial instruments offer a safe and steady way to earn interest on your hard-earned money. However, when you want to make the most out of your FD, knowing how to secure the highest interest rates is crucial.

If unsure, here are practical tips to ensure the best returns and FD interest rates. It also highlights ways to open your FD online.

About Fixed Deposits

FDs let you deposit some amount with a bank for a predetermined period. During this time, your money earns interest. This gets added to the principal amount. The interest on your FD is a crucial factor in determining the returns on your investment. Hence, you need to aim for the highest interest rates possible to make the most of your FD.

Tips to ensure highest rates

The interest rate on FDs typically varies across tenures and banks. It also depends on other factors. Hence, to secure the highest FD interest rates and ensure maximum returns, follow these steps:

Do your research

Different banks offer varying FD interest rates. Spend time researching and comparing the rates offered by various banks. Look for a bank that consistently provides competitive rates for the tenure you want.

Select a longer tenure

Generally, Fixed Deposits with a longer tenure offer higher interest rates. Keeping your money invested longer might make you eligible for better and more attractive rates.

Apply for senior citizen rates

If you are a senior citizen, some banks offer special FD rates. These are usually higher than regular rates. Take advantage of these offers if you are eligible.

Tips to maximise returns

Apart from this, carefully choosing between cumulative and non-cumulative FDs can help. Cumulative FDs let your interest compound over time. Consequently, you get higher overall returns. Alternatively, non-cumulative FDs provide regular interest payouts. Holding your FD to the end of its tenure can also prove beneficial.

How to open FDs online?

Today, you can use a Banking app to open and manage your FD from the convenience of your space. The process saves time and prevents you from visiting the bank and filling out the form manually.

Banking apps offer a convenient way to open and manage your FDs. You can open new FDs instantly, explore FD interest rates, add a nominee, etc., from the comfort of your smartphone.

Net Banking platforms let you manage your FDs online. You can view your details, initiate FD renewals, etc.

Securing the highest interest rates is an easy way to maximise the returns on your FD. By researching well, comparing rates, and choosing longer tenures, you can boost your earnings. Additionally, making informed decisions and using available tools can let you make the most of your investment journey.

[digitalbankingindia]

How do deposit calculators work?

Banks are safe as they guarantee fund security and access. You rely on their services and open a Bank Account to enjoy its benefits and features. It is also a popular financial product offered by all banking institutions in India with varying interest rates. Deposit schemes also offer higher interest for capital appreciation.

When investing in Deposit Accounts, using an RD calculator to compute the estimated returns with interest over the tenure is ideal. The interest depends on the chosen tenure and frequency of payouts. The formula for interest calculation is A = P(1+r/100)^n x t. Here, A refers to the maturity amount, P denotes the principal amount, R is the interest rate, N is the frequency of compounded interest, and T is the tenure.

How do they work?

It is easy to find online tools for all investments. They assist you in calculating the returns and planning finances. You must enter the tenure and deposit amount to calculate the maturity returns. It assists you in calculating cumulative and non-cumulative payouts. Fill in the customer type, Deposit type, amount, and tenure to reflect the interest and maturity amount. You save time in manual calculations and determine the investment returns instantly.

How to maximise returns?

To maximise your returns on the Deposit Accounts through the Banking app, you must know the factors associated with the final maturity amount. Higher deposit amounts mean higher interest. The longer the tenure, the higher the interest. Also, a higher interest rate yields a greater interest amount.

The interest frequency of the Recurring Account is monthly, quarterly, half-yearly, and annually. However, frequent interest compounding decreases the amount. You can invest in Deposit Accounts and get guaranteed returns since they are a traditional and reliable investment method.

What is the minimum investment amount?

The minimum amount you can invest in an RD varies between banks. You can start with Rs. 500 and deposit the same throughout the tenure. There is no limit on the maximum deposit amount. Therefore, you can compute the figures flexibly on the Recurring Deposit calculator.

What are the benefits of using them?

A Fixed and Recurring Deposit Account is a secure investment avenue offering fixed returns. Many banks are offering these online and making them easier to operate. You can skip the physical process of visiting the bank to open them.

If you enter the variables correctly, there are no chances of errors while using the RD interest calculator. Use it at any time and from anywhere without any hassles. You can also use it to compare the performances of other investment schemes.

Conclusion

You can invest in Fixed Deposit for tenures ranging from six months and extending to 10 years. You can select it in multiples of three months after the first six months, i.e., nine months, 12 months, 15 months, etc., and invest in them. Additionally, they are free from market fluctuations.

[digitalbankingindia]

Tips for using the RD calculator

Investing regularly in a product is the best way to grow your corpus. Investments involving regular instalments help build savings and enforce discipline among investors. You learn how to save money for the instalment debit from your Savings Account to earn considerable returns and build an emergency corpus.

When you invest in Recurring Deposits, you use small amounts regularly over a specific period. At the end of the maturity period, you get the entire principal contribution back with interest accumulated. Here are some tips to consider while using the RD calculator:

Present interest rates

The RD interest rates primarily depend on the investor’s age. For non-senior citizens, the interest rates tend to be lower. On the contrary, for senior citizens, banks offer a slightly higher interest rate.

Understand the purpose

Before using the Recurring Deposit calculator, understand its purpose. You can quickly determine the interest component and maturity amount you will likely get from the investment. It lets you plan your investments and get more information on them. Likewise, you can save for other purposes like education, marriage, or buying a house or a car.

Minimum and maximum tenures

Many banks set a minimum and maximum tenure for a Recurring and Fixed Deposit. These tend to vary from one entity to another. Ensure you use the deposit calculator correctly by determining the minimum and maximum tenure on the Deposit Accounts.

Keep TDS in mind

The deposit calculator does not account for Tax Deducted at Source (TDS). Every bank will automatically deduct it from your RD or FD interest if the total interest you will likely receive in a financial year exceeds Rs. 40,000. It would help if you accounted for TDS since it can reduce the amount you receive on maturity.

Minimum monthly contribution

Each bank’s tenures tend to differ, and the minimum monthly investment also varies. The tool displays results that are relevant to you. First, you must ascertain the minimum monthly investment for the deposit.

Double-check the values

The best way to ensure you use the calculator correctly is by double-checking all the entered values. You can easily spot mistakes or errors, which may skew your results. However, you can use the calculator 24x7 on the Banking app without downloading additional calculation software, saving effort and time.

Maturity amount

The maturity amount gets calculated differently. The interest gets compounded quarterly and accumulates until maturity. The accrued interest and the principal amount get repaid to the depositor. You can open a new account with the same bank or opt for another one after maturity. However, do not forget to calculate the estimated returns on the Recurring Deposit calculator.

Conclusion

Since the interest rate on an RD is liable to change periodically, always check the current interest rates applicable to you before investing in one. Compare them with other banks before finalising the scheme.

[digitalbankingindia]

Perks of using an online RD calculator explained!

Recurring Deposits, commonly known as RDs, are a popular type of investment that enables individuals to save money gradually. With an RD Account, you can deposit a fixed amount of money regularly, typically monthly, for a predetermined period and earn interest. Once the RD matures, the accumulated amount and the interest earned get credited to the depositor’s Savings Account.

Using the RD calculator, it is easy to calculate the total amount you can earn upon maturity. The interest rate is generally fixed for the entire deposit duration, making it an attractive savings scheme as the rate does not fluctuate, unlike some other investment products. Here are the perks of using it:

Accurate calculations

The calculator can perform accurate calculations, considering the principal amount, the RD tenure, and the interest rate. It helps users to get a clear idea of the expected returns on their investment. No matter how often you change the variables, you get accurate results. It saves time and offers instant access from anywhere.

Saves time

The Recurring Deposit calculator saves many users’ time as they need not perform manual calculations to get the maturity amount. You only need to enter the values as requested by the calculator, which provides the expected returns in no time.

Easy to use

This calculator is easy to use. Enter the monthly investment amount, tenure, and interest rate to get the maturity amount quickly. You can enter it manually or adjust the sliders to modify the values.

Moreover, it is accessible on the Banking app, which lets you track your income, investments, and other financial obligations from any corner of the world. It is a user-friendly tool enhancing your experience and making you aware of your finances.

Helps in financial planning

You contribute to financial planning when using deposit calculators to calculate FD and RD returns. These tools let you plan your savings by providing a clear idea of your investment returns, enabling you to make better financial decisions.

Freely available

Deposit calculators are available for free on most banking portals and apps. You need not pay money to use them. You can endlessly alter the variables to find a suitable combination for your financial needs.

Cost-effectiveness

One of the benefits of investing in deposit schemes is the cost-effectiveness. You can use the RD interest calculator to compute the amount you can borrow as Loan against the deposit. Banks accept 80% to 90% of the RD amount as Loans, considerably reducing your financial worries. Premature withdrawals are also possible after paying a penalty to the bank.

Final words

Using the calculator on the Personal Banking app enables you to adjust the investment amounts and tenures according to your budget, finances, and savings while earning guaranteed returns in the form of interest. You can also compare several schemes on this calculator to assess which suits your goals and make informed investment decisions.

[digitalbankingindia]

Which one to choose between FD and RD for better returns?

Money is a valuable tool that helps you fulfil all your expectations. It allows you to lead a secure future. You work hard to earn it and would be concerned for its safety. Banks are the safest institutions to deposit your earnings and let them multiply over time. Depending on the chosen account type, they offer interest on all Savings and Deposit Accounts.

A Term or Fixed Deposit lets you accumulate interest on your corpus for the future. This helps meet emergencies, financial goals, and big-budget purchases. Upon maturity, you receive the invested amount with interest. These saving instruments do not get linked to the market. Hence, you do not get subjected to uncertainty. The following aspects help you choose between the two types of deposits:

Meaning

FD is a long-term investment that requires you to deposit a large sum at once and withdraw it after the chosen maturity period. You receive interest in your Savings Account either monthly or quarterly. The tenure for the same ranges between seven days to 10 years. For an RD, you should select a term between six months to 10 years for every bank you choose. But you need not make a lump sum one-time deposit.

Instead, you deposit a fixed sum monthly and earn interest on it. You receive your total investment with interest upon maturity. The interest stays the same throughout the investment period.

Interest yield

The Fixed Deposit interest rates are relatively higher than the RD. This is because it applies to the lumpsum amount annually. Whereas in RD, the interest gets compounded quarterly. In the RD, you begin investing a small amount and gradually increase it. The FD calculator is an online instrument that helps you check the exact return rate on the deposit. It is accurate, fast, and user-friendly.

Access them anytime from the banking websites and adjust the variables accordingly. There are no limitations to using this calculator, and it is a boon for all depositors.

How to choose?

The decision depends on your financial status. An RD is perfect if you do not have a significant investment amount but wish to accumulate regular savings. You keep a fixed sum aside monthly so it does not weigh your expenses. Time the deposit to meet holiday, emergencies, or child’s higher education expenses. You can systematically track them through the Banking app.

For example, if you have a sizeable chunk as a salary bonus, invest it in Term Deposits and spend it on higher expenses like buying a new car. They are popular with senior retirement planning, assured returns, and interest payouts. Both Deposit Accounts offer decent returns but have varying terms for short and long-term goals. Hence, it is best to assess them to make an informed selection.

[digitalbankingindia]

Tips to get maximum interest on FD and RD Accounts

When you have funds, you do not plan on spending, it is a good practice to invest them. This applies to your regular income as well. Stacking away a portion of it serves as a good emergency fund. Banks provide two distinct Deposit Accounts for both approaches: Fixed and Recurring Deposit Accounts. The former is great for parking your capital in lumpsum while the lets you flexibly deposit every month.

Despite the varied investment method, both accounts offer risk-free returns. This is because they are not market-linked and have predetermined terms. So, if you like secure investments, you should consider FD or RD to build capital. While researching the same, you come across competitive interest rates. Now, Bank Deposits have higher interest than Savings Accounts but fall short compared to Mutual Funds.

Hence, most people contemplate investing in them. However, there is a way to maximise the interest:

Compare offers

The interest rates vary based on your banking partner's policy. This depends on factors like the institution's policy, investment amount, tenure, account type, etc. Hence, it is wise to make an informed selection based on research. The internet is a great and reliable source as most banks have established online presence.

Go to their website and read the interest rate and associated terms. You can also use an RD or FD calculator to compute the estimated returns.

Spread your investments wisely

Avoid putting all your money into one investment. This is a popular fundamental followed for Share Market investments. The same applies to Bank Deposits too. To maximise your interest, you need to create multiple sources. Hence, open multiple RD or FD with different banks. This is called laddering, where you invest in varying amounts, tenure, and interest rates to offset risk.

Leverage tax benefits

You get tax provisions with Bank Deposits. This depends on your interest income and account type. As with Term Deposits, you are eligible to get up to Rs. 1.5 lakh under Section 80C. It is when you opt for a Tax-Saving Account with five years tenure. You can also claim the exemption when your income does not fall under the tax slab.

For this, you submit a declaration form 15 G or H. With RD Account, you need not pay taxes if your interest income is below Rs. 10,000.

Choose the right duration

As your funds stay locked for the chosen tenure, it is important to choose wisely. Consider your liquidity needs for the same to avoid premature withdrawals. Withdrawing before maturity not only costs penalties but also reduces interest income. You get tools for planning on Banking apps and websites for assistance.

Conclusion

Maximising your FD or RD interest income is relatively easy. With discernment and following the tips mentioned, you should not have any problem achieving the same.

[digitalbankingindia]

How do features of Fixed Deposits differ from Recurring Deposits?

Investments need not be risky to reap higher benefits. Banks understand this and provide simple investing tools like Fixed and Recurring Deposits. These are risk-free instruments that offer assured returns. The account opening procedure for the same is straightforward. You only need to complete the standard KYC requirement and upload the required documents. Both are lucrative investment opportunities.

However, tend to get confused about how they work. This makes them lose out on the benefits they offer. If you want to utilise FD and RD to earn higher returns optimally, you should learn about them. Understand how they differ to make wise investment decisions. Learning about the differences becomes easy with these contrasting features:

Investment method

The most significant difference between the Deposit Accounts is the investment mechanism. When you have surplus funds, it is good to stack them away to multiply. This is where the Term Deposits are helpful. But as most people do not have saved-up capital, banks offer RD Accounts as an excellent alternative.

It lets you invest from your monthly income regularly. This way, you can grow the capital in your Bank Account without accumulating the funds first.

Tenure

Although not drastically different, the Bank Deposits have varied duration. They offer similar flexibility to plan your investments based on your financial goals. For instance, FDs come with a period ranging between seven days to 10 years. With RDs, the investment term ranges between six months to 10 years. This lets you fulfil your short and long-term goals.

Interest payout

Unlike lumpsum deposits, the FD rates get paid regularly. This depends on your selection between monthly, quarterly, or yearly payouts. It is a great option to get regular income from your surplus capital. However, RDs release the investment amount with returns only upon maturity.

Opening eligibility

Anyone can open a Term Deposit with the bank. There are no specific eligibility criteria except for sufficient funds. It is most suitable when you have surplus capital to invest. However, RDs need you to invest every month. Hence, you should have a monthly income to keep the investment afloat. Defaulting results in a penalty. Therefore, basic eligibility has a regular income source.

Deposit amount

It is convenient to start a Deposit Account as the initial deposit requirement is minimal. Even if the Term Deposit asks for lumpsum investment, it comes with a minimum deposit of Rs. 5,000 or Rs. 10,000. The same is mentioned on your Banking app or website for further clarity. This is a manageable amount if you have surplus funds.

The exact figure depends on the bank. As for RD schemes, you start with as low as Rs. 500. You can also confirm the value through the app or website.

[digitalbankingindia]

Why should you open a Recurring Deposit as a salaried individual?

Recurring Deposits are a safe, popular and trusted investment scheme among Indians of all ages. An RD can be opened in the bank, post office, or online. It involves making periodic deposits and earning higher returns than a Savings Account. An RD lets you grow your monthly savings over a fixed period.

How to open an RD and invest in it?

Once you decide to make RD Investments, contact your preferred bank and inform them about your investment plan. An RD Account can be opened only after you decide on the investment amount that needs to be deposited monthly, the investment tenure, and the Recurring Deposit interest rates you will get. Once you choose the best scheme, complete the form and submit some documents.

You can make monthly payments through a Banking app or website or visit a bank based on your preference. Another way to open an RD Account is by linking it directly with your existing Savings Account. Opening an FD Account is relatively easy nowadays.

RD Accounts and benefits to salaried people

These are some advantages of RD for salaried people:

RD schemes are an excellent option as you need not invest lumpsum amount at once. You can invest a small, predetermined amount of your monthly income as an investor. This makes it a beneficial investment instrument to build a saving habit and reduce unnecessary expenses.

You can consider investing in the RD scheme if you have a low income. This is because the minimum investment amount is Rs. 1,000 per month. Furthermore, you only need to invest periodically.

The principal amount with interest gets returned at maturity time. This amount can be used for short-term financial situations like vacation, tuition fees, marriage, higher education expenses, etc.

The entire amount you invest in RDs is safe and secure. It gets returned along with interest after your tenure.

Nowadays, most banks offer the facility of opening a Recurring Deposit Account You can deposit money, view transactions, or update your details online.

The interest rates are visible to you when you choose a scheme. You could even use the RD calculator to check the returns you will earn. Furthermore, this also protects you as an investor from interest rate fluctuations.

Conclusion

Now that you know about RDs, RD rates, and the benefits of opening an account as a salaried individual, open one soon.

[digitalbankingindia]

Common questions about the Fixed Deposit interest calculator answered

Fixed Deposits are the market's safest and most profitable investment options. FDs let you invest money for a fixed interest over a certain period. Upon maturity, you receive a lumpsum amount. This amount involves the principle and the interest rate accumulated over that period.

You should consider using the FD interest calculator to maximise your investments. This calculator determines the interest amount and the final lump sum amount you can get from the investments. It is a handy tool and is freely accessible online. Furthermore, the calculator lets you compare interest rates and the investment duration to maximise your investments.

Use of the FD calculator

The projection of your returns is an important aspect of your financial planning. It assists in making better investment and purchasing decisions. This is where an FD calculator helps. Calculating the amount you will get upon maturity manually may be complex. You might make some errors and get confused. This only leads to unnecessarily devoting a lot of your time to it. However, this can be avoided by using an FD interest calculator.  

How are FD returns calculated?

Calculating the FD interest through an FD calculator online is a simple and quick process. The steps involve:

Firstly, select the category of citizen you fall under. For instance, the category could be a senior citizen or an adult.

Secondly, you choose the type of FD you want to open. The types usually include Cumulative or Non-Cumulative FD.

Thirdly, decide between the amount and duration of the Fixed Deposit.

Lastly, input additional details as needed by the FD calculator. You should also thoroughly check your details once you fill them in the calculator.

The FD calculator displays the desired interest amount and the total amount you can expect to receive once the tenure ends.

Benefits of FD calculator

There are numerous benefits of using an FD calculator while comparing interest rates across multiple banks to plan your investments and reach your financial goals. These FD calculator benefits include:

Simplifies investment calculations

Assist in creating a profitable financial plan

Allows comparison of FD schemes

Provides analysis of current FD rates

Time-saving and hassle-free

Evaluates the associated risk

Assists in making an informed decision

Takeaway

If you are determined to open an FD Account over the bank portal or a Banking app and are struggling to find the right FD plan, use the FD calculator to ease your financial decisions.

[digitalbankingindia]

Interesting factors that affect Fixed Deposit interest rates

Fixed Deposits are a popular investment in India, offering a guaranteed rate of return over a fixed period. Understanding several factors that affect its interest rates can help you choose a suitable Fixed Deposit scheme and earn better returns. So, this article covers the crucial aspects that affect Fixed Deposit interest rates.

Economic conditions

The economic conditions of the country can significantly impact Fixed Deposit interest rates. When the economy is performing well, the Reserve Bank of India may increase the repo rate, increasing the rates. However, when the economy slows down, the RBI decreases the repo rate, reducing the rates.

Inflation

This is another factor that affects interest rates. When inflation is high, the RBI may increase the repo rate to control inflation, which leads to increased interest rates. Conversely, when inflation is low, the RBI may lower the repo rate, reducing interest rates.

Liquidity conditions

Liquidity conditions in the market can also affect FD interest rates. Banks may increase their rates to attract deposits when there is a liquidity shortage in the market and vice-versa.

Credit rating 

The bank's credit rating also impacts the interest rates. Banks with a high credit rating are considered stabler and more secure and may offer higher interest rates to attract more customers. Banks with lower credit ratings may offer lower interest rates on their FDs to compensate for the higher risk.

Tenure

The FD tenure is another factor that affects the interest rates. Generally, longer tenures attract higher interest rates, as the bank can use the funds longer. Short-term Fixed Deposit offers lower interest rates, as the bank can use the funds for a shorter period.

Type of FDs

Different FDs come with varying rates of interest. For example, senior citizens may be offered higher rates as they are considered low-risk groups. Banks also provide special FD schemes for specific purposes, such as tax-saving FDs, which offer higher rates and are tax-efficient

Competition

Competition among banks can also affect FD rates. Banks may increase their FD rates to attract more customers when the market is highly competitive. However, with low competition, banks provide lower interest rates.

Conclusion

Right from economic conditions to high competition, taking care of the factors mentioned is crucial while investing in an FD. These factors help you find the best scheme with a profitable investment return. Lastly, such FD provides the desired profit, so you need to make a choice.

[digitalbankingindia]

Tips and Tricks to Save Money on Remittance Charges

Sending money to families or business partners abroad is becoming increasingly common. However, Remittance costs add up and make sending money highly expensive. Fortunately, there are ways to save money on Remittance costs. Here are tips and tricks that can help you save money on them:

Compare Remittance providers

Before performing a Money Transfer to India, it is essential to compare Remittance providers to find the one that offers the best rates. Different providers have different charges, so it is essential to search around and compare before deciding. You can compare websites to help you arrive at a decision.

Avoid urgent transfers

Urgent transfers come with higher fees. If you can afford to wait a few days for your transfer to be processed, you can save on costs. Plan and send money beforehand to avoid urgent transfer fees.

Use online providers

Online Remittance providers offer lower fees than traditional brick-and-mortar providers. When you do an online Money Transfer to India, there are fewer overhead costs so that they can offer lower fees. Additionally, online providers often provide better exchange rates, saving you money.

Send larger amounts

Sending larger money can result in lower fees. Providers often charge lower prices for larger transfers. If you need to send money frequently, consider sending larger amounts less frequently to save on other charges.

Use a Credit Card or do a bank transfer

Using a Credit Card or bank transfer can save money on Money Remittance fees. Some providers charge for using a Debit Card, so a Credit Card or bank transfer can be an affordable option. However, it is essential to compare the charges by different providers to find the most cost-effective option.

Avoid currency conversion fees

Some providers charge currency conversion fees, adding up to higher costs. To avoid them, opt for a provider that allows you to send money in the recipient's local currency. This can help you avoid currency conversion costs, saving you much money.

Look for promotions and discounts

Remittance providers often offer promotions and discounts on Remittance services, especially for new customers. Look for discounts online, and sign up for newsletters to receive updates.

Consider using a peer-to-peer platform

These platforms are highly affordable for sending money abroad. They connect people who need to send money with those who need to receive money, eliminating intermediaries such as banks and Remittance providers.

Conclusion

Remittance fees may pile up and increase the cost of sending money abroad. As mentioned, there are ways to reduce Remittance fees. Remember that finding the most cost-effective provider to minimise Remittance fees is important.

[digitalbankingindia]

NRE vs FCNR Deposit: Which Is Better?

Fixed Deposits are a secure investment option in India, providing assured returns to investors. This safety makes an FD a preferred and popular choice among individuals who want to grow their money in the long run but have a low-risk appetite. However, FDs are not limited to resident Indians only. Non-resident Indians, too, can choose from various NRI FDs.

These include the Non-Resident External or NRE Deposit, Non-Resident Ordinary or NRO Deposit, and Foreign Currency Non-Resident or FCNR Deposit. NRE and FCNR FDs enable NRIs to save and invest their foreign earnings. However, they are different from each other and serve varied purposes. So, if you have a tough time choosing and are clueless about the differences, the following pointers should help:

What is an NRE FD?

An NRE FD lets NRIs invest and grow their foreign earnings in India. The deposits made in this account in foreign currency are automatically converted into Indian Rupee or INR at the prevailing exchange rates. The investment is maintained in INR during the entire duration and earns interest at competitive NRE FD rates. Some essential features of this FD include the following:

The principal sum and the interest earned on NRE FDs are tax-free in India.

NRIs can freely and fully repatriate the interest and principal amount to their country of residence overseas.

Since the investment is in INR, it is open to risks associated with fluctuating forex rates.

You can open an NRE FD independently or hold it jointly with one or more NRIS. You can also assign a nominee to your NRE FD.

You can choose from flexible tenures lasting from one to 10 years when opening an NRE FD.

What is an FCNR FD?

An FCNR Deposit allows NRIs to invest their overseas earnings in permitted foreign currencies and earn interest during the term of the deposit. Since you can invest in this type of Fixed Deposit in a foreign currency, you do not run the risk of exchange rate fluctuations. Some essential features of this deposit include:

Most banks enable you to make deposits in popular foreign currencies like the US Dollar, Singapore Dollar, Great Britain Pound, etc.

You can choose from tenures ranging from one to five years.

Typically, the deposit amount has no minimum or maximum limits.

The principal sum and interest earned are fully and freely repatriable in an FCNR Account.

The interest earned on an FCNR Account is exempt from Income Tax in India

Which should you choose?

Opening an NRE FD is better for those investors who wish to invest their foreign earnings in India in hopes of using it to manage their expenses in India. An FCNR Deposit Account is a better investment decision when NRIs want to address investment-related issues and expenses outside India.