Fixed Deposit Interest Rate: Get All Information

The fixed deposit can be classified as a type of investment where you deposit an amount for a fixed period of time and you receive the interest over the fixed amount. This is one of the safest and risk-free investment. As the banks are directly involved in securing the money that has been deposited in it. The Fixed deposit interest rate is one of the main concern of most of the people. You can read the article below to know every detail about it.

It is one of the oldest and most trustworthy ways of securing the money and earn the interest over it. The main reason for the popularity is the trust that the scheme has maintained over the period of time. For general people who do not want to take the risk and wants the guaranteed returns, always opt for the scheme of term deposit.

You can invest for a short-term, mid-term, or large term as per your convenience. The depositor can put the money for the minimum of 7 days to the maximum of 10 years. You get a lot of benefits in this scheme. You can opt to reinvest the money and gain the interest over the amount. The fixed deposit helps you in tax deduction. If the amount of less than 1.5 lakh is deposited for the tenure of 5 years then no tax is levied on it. Whereas the tax can be leveraged on the interest amount. Here you get the high-interest rate as compared to the interest rate on the savings account.

The Points to Remember for Maximum Outcome-

• The Principal amount that is deposited with the banks or NBFC should be carefully seen before choosing the scheme.
• Duration of the time period.
• Penalty Clause.
• The interest rate on the fixed deposit.

Factors affecting the interest rate for the fixed deposit- There are many internal as well as external factors that affect the rates of the fixed deposit. Some of them are briefly:

RBI regulations-  The Reserve bank of India is the head regulator for the banks. They often make changes in the policies. Due to this monetary policy and changes in it, the interest rate fluctuates accordingly.

Inflation- one of the important factor. When the inflation hit the economy the rates of all the commodities increases and the prices become dearer for all the items. In such a scenario, the rates increase so as to increase the flow of cash in the bank so as to pacify the inflation and bring the economic situation in control.

Demand and supply of credit - The demand and supply of credit in the economy plays its own role in the rate change. If the demand for money is more and supply is less from bank’s end then the rates increases. It increases so as to encourage the depositor to invest in the fixed deposit which ultimately increases the bank's credit and they are able to fulfill the requirements. It is exactly opposite if the situation is different where the demand is less and the supply is more.

Current economic scenario-  The current situation that is prevailing in the economy also decides the rates for fixed deposit. If the bank has enough liquidity then the interest rate is low while it is more when the liquidity is less. Thus if the economy is stable then the rates tend to decrease accordingly.

Thus, there are many things which affect the fixed deposit rates. You should consider these factors before investing in any term deposit scheme. It is one of the ways to increase the savings but it might give fewer returns as compared to the other risky investment. While here with the help of Fixed deposit interest calculator you can know the amount you will be receiving at the end of the tenure. You will have exact details about the returns. This can help you to be assured of a certain amount after you have completed the tenure.

You should compare the interest rate provided by different banks and NBFCs before depositing the amount. Every bank provides different rates and you can go online to check the offers given by all the banks. Choose and select the one which is more beneficial for you. Also, read the fine prints carefully before agreeing to the clauses. To obtain the maximum benefits you will have to look out for all the details before opening an account with your desired bank which gives you maximum benefits.