People always hesitate when it comes to investments. Investments are often considered risky which makes people rethink about it. Most of the investment options are depended upon the market conditions. This is the reason why they are considered as high-risk investments. If market conditions go down one can also face a loss whereas if the market condition rise you can earn huge profit. The market conditions and its rate are unpredictable.

But this is not always the case. One can also opt for investments that involve the low risk like fixed deposits. The fixed deposit interest rates are generally higher than a savings account. Thus it is suggested to go for investing funds in FD than saving it.

Even though mutual funds, shares and gold investments offer you higher returns they usually involve less risk as it is depended on the market conditions. As you know market conditions keep on changing and this makes the investments unsafe. The interest rates offered on these investments are generally unstable. One can also get low returns on these investments as they are going through a constant fluctuation.

On the other hand interest rates on fixed deposits are fixed. You are offered a fixed interest rate throughout the loan tenure. Your rate of interest does not fluctuate as fixed deposit interest rates don’t depend upon the market conditions. This is the major reason why fixed deposits are considered as a safer investment option.

What things should you check before a fixed deposit investment?

The fixed deposit interest rates often vary from banks to banks. That is different banks offer a different rate of interest. Some banks can offer you with high-interest rates whereas some may offer you with low-interest rates on the same amount. You should also know that your fixed deposit interest rates are depended on two factors: investment amount and tenure.

  • Fixed deposit amount:

The interest that you get on your investment is what decides your return. Whether you earn a high profit or a low one completely depends on your interest rate that bank offers you. It’s important that one checks its interest rate before opting for an investment. But it’s also important that you look at the amount you are going to invest as that decides your interest rate. If you are investing a huge amount, the interest rate that you will get over it will be high whereas if you are investing a small amount the interest that you get on it will be low. One cannot expect to get higher returns by investing a small amount. Thus the amount you invest reflects your returns. Also while investing you should remember that fixed deposit is a one-time investment.

  • Investment tenure:

Now your interest rate also depends upon the investment tenure. The period that you are investing for also decides how much returns you will be earning. You have two options when it comes to fixed deposit investment tenure. One is a long-term investment and the other is a short-term investment. A short-term investment is for a period of 1-3 years. Whereas a long-term investment period consists of 5-10 years. Depending upon the tenure you chose bank will decide your interest rates that are to be offered by them.

It’s important that you check these factors before going for an investment. It’s also important that you calculate your fixed deposits before investing your funds with the help of fixed deposit calculators as interest rates offered to you by banks can differ.

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One response to “What to check while buying a Fixed Deposit?”

  1. k nagaraj says:

    dear sir,i am registered GST dealer doing works contract in karnataka. if i want to carry our works contract in telangana state whether i have register in telangana also to carry out works contract.if so if i purchase cement related product attracting 28 % GST from telangana, what rate is applicable as per GST rules if the same cement product is being sold to my client in telangana itself?

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