If you are also thinking of investing your money in FD schemes because of the increased interest, then you should also take care of some things very much. Many small finance banks are offering FD very handsome interest to their customers. At the same time, both private sector and government banks are giving the benefit of higher interest rates to their customers. For example, Suryoday Small Finance Bank is giving 9.1 percent interest rate benefit to its customers and Unity Small Finance Bank is giving 9 percent interest rate benefit to its customers.
During the last few times, almost every bank in the country has increased the interest rate on Fixed Deposit (FD) for its customers. Some banks are giving their customers the benefit of 8-9 per cent returns on fixed deposits. Explain that during the last one year, the Reserve Bank of India (RBI) has increased the repo rate several times. After which the repo rate is currently at 6.5 percent.
Keep these things in mind while taking FD
If you are also thinking of investing your money in FD schemes because of the increased interest, then you should also keep some things in mind. Many small finance banks are offering FD very handsome interest to their customers. At the same time, both private sector and government banks are giving the benefit of higher interest rates to their customers. For example, Suryoday Small Finance Bank is giving 9.1 percent interest rate benefit to its customers and Unity Small Finance Bank is giving 9 percent interest rate benefit to its customers.
What do experts say
Shaveer Bansal, founder and CEO of fintech startup Kifayat, says that we should keep in mind that generally higher interest is associated with higher risk. Since small finance banks are newer and smaller than traditional and larger banks, their capital base is also smaller. For this reason, there is also a chance of risk in such banks. On the other hand, Adil Shetty, CEO of BankBazaar.com, says that the higher the interest rate, the higher the return on your investment. However, if the interest rates are higher than others, then the risk there will also be higher.
Invest in different banks
Akshar Shah, founder and CEO of investment technology platform Fixed, says that we should always keep our investments in different banks. Different banks give the benefit of different interest rates. Adil Shetty says it doesn’t matter where you invest your money. Shetty believes that it is more important to focus on trust, service, diversity, offer and customer service. Apart from this, you also need to check whether the bank is covered under a deposit insurance scheme, such as the Deposit Insurance and Credit Guarantee Corporation (DICGC), which insures claims up to Rs 5 lakh. DICGC provides an additional layer of security to FD investors. Apart from this, it is also important for you to create flexibility between different periods.
Know about maturity also
Apart from this, sometimes you may have to withdraw money from FD even before maturity. In such a situation, you should also know about how much fine can be imposed on this. Along with this, before investing money in bank FD, you should also know about the financial condition of the bank. Shaveer Bansal says that the capital ratio, profit, liquidity and management of any bank in which you want to deposit money must be checked. Also you should check the credit rating of the bank. Apart from this, you should deposit money in the bank located near your home. Sometimes there are situations when RBI refuses to withdraw money from banks.
Investing in different places is beneficial
Shetty says that if your account is in a bank for a long time and it is in financial crisis, then it can put your entire investment at risk. If you keep your money in different places then it will reduce the risk. Apart from this, sometimes it also happens that other banks offer better interest than your bank.
Repo rate will not be increased now
Bansal says that now the Reserve Bank will not increase the repo rate. If inflation remains under control, then the repo rate can also be expected to come down. Since FDs are getting higher interest due to the repo rate at present, this can be one of the best times to invest in FD schemes.
