Fixed Deposit (FD): Interested in investing in FDs, these 3 tips can help you maximise returns

With the stock market performing well for many months, investors have many options to get high returns, but a lot of investors seek options that give them guaranteed returns.

They want risk-free investment options that are undeterred by market fluctuations. Fixed Deposit (FD) emerge as one of the safest and most popular options for them. They think their money will remain safe in FD.

Apart from this, they can invest in FD for durations ranging from 7 days to 10 years. With the banking sector performing well for some time, many lenders are offering high interest rates on FDs. However, rates may differ from bank to bank. If you are also going to invest your lump sum amount in FD, keep these three things in mind that can help you maximise your returns.

FD: Choose the right tenure

Before investing in an FD, invest money only after thinking carefully about its tenure.

It is because if, after investing in an FD, you break the FD before its maturity, you have to pay a penalty for it. In such a situation, you do not get the interest on FD for which you had invested the money. If the FD is broken before it matures, a penalty of up to 1 per cent is also levied on it.

FD: Do not invest all your money in one FD

If your amount is large and you want to invest it in an FD, do not invest all your money at once in one place, but invest it in different FDs.

Suppose you have Rs 5 lakh, you can invest in 5 different FDs of Rs 1 lakh each.

Fix each FD for different tenures ranging from 1 year to 5 years.