Fixed Deposit

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What Is a Fixed Deposit and How Does It Work?

A fixed deposit is one of the safest and most popular ways to save and grow your money in India. It has a sure return and is easy to understand, which is why millions of Indians avail themselves of it. We at Invest Global help you make smart investment choices, such as a comparison of the best fixed deposit rate for your needs.

Why opt for a Fixed Deposit?

A fixed deposit (FD) or FD is keeping your money in a bank or money company for a specified period of time and getting interest on it. You receive your initial money (principal) and the interest you have earned once the time period is finished.

As per RBI, more than half of savings in Indian families invested in FDs. They are secure, sure, and easy- appropriate for all age groups.

Types of Fixed Deposits

Bank Fixed Deposits

They are provided by banks. You can opt for a tenure ranging from 7 days to 10 years. The interest rate on the fixed deposit varies with the bank and the tenure you select.

Corporate Fixed Deposits

These are like a bank FDs but provided by NBFCs (non-banking finance companies). They have a higher fixed deposit interest rate, which is why they are a favorite among savvy investors.

Bank FD vs Corporate FD - What's the Difference?

1. Rate of Return

  • Bank FD: Lower but safer.
  • Corporate FD: Usually offers a better fixed deposit rate. For example:
  • SBI (3-5 years): ~6.1%
  • Bajaj Finance (3-4 years): ~7%

Tip: Compare investments on Invest Global to get the highest fixed deposit interest rates for your needs.

2. Tenure

  • Bank FD: 7 days to 10 years
  • Corporate FD: 12 months to 4-6 years If you are going to invest for over 6 years, banks provide better long- term investment options.

3. Lock-in Period

  • Bank FD: No lock-in; withdraw anytime.
  • Corporate FD: May have a 3-month lock-in period. Not all have this, but check before you invest.

4. Premature Withdrawal

  • Allowed in both, but banks offer more accomodating.
  • Bank FDs have:
  • No lock-in
  • Lower penalty

Invest accordingly based on your need for liquidity or return.

5. Taxation

Both bank and corporate FDs are taxed the same. The interest you earn is added to your income and taxed according to your tax slab.

Important Points Before Investing in Corporate FDs

1. Interest Rates

NBFCs offers various fixed deposit interest rates . While some give the highest fixed deposit rate , always balance risk with return.

2. Credit Risk

There is a risk that the NBFC might delay or miss payments. Always check the credit rating of the company before you invest.

3. Tenure Options

More tenure usually translates to more returns. Pick according to your intention, short-tern requirements or long-term accumulation.

4. Modes of interest payment

  • Non-Cumulative: Monthly, quarterly, or annual interest
  • Cumulative: Interest is added to the principal, giving compound growth

Choose what suits your need-steady income or wealth creation.

What Are Bonds and How Are They Different?

Bonds Explained

Bonds are debt securities that pay a fixed interest periodically and deliver the principal at maturity. Bonds are very popular in developed nations. In India, also, bonds are gaining popularity, particularly among retail investors and HNIs.

How Bonds Work

  • You can purchase bonds from:
  • Primary Market: At face value, when first issued
  • Secondary Market: Through stock exchanges
  • You need a Demat account to trade in the secondary market.
  • Bonds offer interest (coupon) periodically as well as principal at the end.

Bonds offer flexibility and regular income, but you should compare them with the best fixed deposit rates before choosing.

How Can Invest Global Help?

At Invest Global , we help you compare FDs from banks and NBFCs to find the highest fixed deposit rate that matches your needs. Whether you're a beginner or a seasoned investor, our tools and advisors are here to support you.

You can also explore smart alternatives like bonds and SIPs, and stay updated with the latest trends and options.

Conclusion - Is a Fixed Deposit Right for You?

A fixed deposit is a low-risk investment ideal for saving money with assured returns. It suits those who:

  • Want safety and peace of mind
  • Need short or medium-term savings
  • Prefer guaranteed interest

If you're looking for the best fixed deposit rates , or want to know where to find the highest fixed deposit rate, Invest Global is your trusted partner.

Start your journey with a safe and smart investment today!