Category: Investment

Invest in Axis Bank Fixed Deposit to Increase Your Savings

Axis bank is one of the trusted private banks in India. The bank offers a wide range of products and services that help the people at the time of financial requirements. Axis bank fixed deposit is one such product that is used by the people to keep their savings for a fixed tenure and in return, they get the interest rate on the amount fixed. The fixed deposit is beneficial in many ways especially if you have savings then instead of keeping the money in the saving account and earning a meagre interest rate you can fix the amount and get twice the amount of interest rate applicable in the savings account. The minimum amount that the depositor can deposit is ₹10,000 and there is no maximum limit for the fixed deposit.

fixed-deposit-1

Axis Bank fixed deposit is a type of investment where you earn the interest rate amount over the amount deposited for a particular period of time. The fixed deposit can be short term deposit, mid term or long term deposit. The tenure of the fixed deposit is can vary from 7 days to 10 years. The depositor can choose to invest in any term and gain the benefits. It also helps in the tax deduction if the amount fixed is less than ₹1.5 lakh for 5 years. You have the option to reinvest the amount and earn interest over it to get the double benefit.

Eligibility Criteria Required-

To have a fixed deposit account you need to fulfill certain criteria and then you will be eligible to deposit the amount in the bank to earn the good rate of interest from them. Below mentioned individual or group are eligible for a fixed deposit:

  • The applicant should be the Resident of India.
  • Hindu undivided families
  • Sole proprietorship firms
  • Partnership firm
  • Private limited companies
  • Trust accounts

Documents required-

The documents required by the individual, Hindu undivided family, and sole proprietorship while applying for the fixed deposit are:

  • A coloured photograph
  • Passport/ Driving License
  • Last six months bank account details

Documents required from the trusts for a fixed deposit are as follow:

  • Photographs of the member operating the account.
  • Copy of the Trust Deed.
  • Copy of Registration Certificate.
  • Copy of the resolution of trustee authorizing the member to operate and open the accounts.

Documents required from the  association/ clubs for the fixed deposit are as follow:

  • Photographs of the member operating the account.
  • Copy of the Bye- laws of the association.
  • Copy of the resolution of trustee authorizing the member to operate and open the accounts.

Documents required from the partnership firm for the fixed deposit are as follow:

  • Photographs of the persons operating the account.
  • Partnership Deed
  • Letter from the partners approving the person to operate and open the account.

Fixed deposit Interest rate in Axis bank-

  • 7 days to 45 days the rate of interest is 3.50%
  • 30 days to 45 days the rate of interest is 5.50%
  • 46 days to 3 months the rate of interest is 6.00%
  • 3 months to less than 6 months the rate of interest is 6.25%
  • 6 months to less than 9 months the rate of interest is 6.50%
  • more than 9 months to less than 1 year the rate interest is 6.75%
  • 1 year to less than 2 years the rate of interest is 7.00%
  • 2 years to 10 years the rate of interest is 6.75%

The fixed deposit interest rate in Axis Bank for Senior Citizens-

  • 7 days to 45 days the rate of interest is 5.50%
  • 46 days to 3 months the rate of interest is 5.75%
  • 3 months to less than 6 months the rate of interest is 6.00%
  • 6 months to less than 9 months the rate of interest is 6.25%
  • more than 9 months to less than 1 year the rate interest is 6.25%
  • 1 year to less than 2 years the rate of interest is 6.25%
  • 2 years to 10 years the rate of interest is 6.25%

Axis Bank Fixed Deposit Plus-

It is the one of the fixed deposit scheme started by the bank for the retail and corporate customer who wish to deposit the principal amount not less than 15 lakh at one time. This scheme is applicable if the amount is deposited for more than 1 year and less than 2 years. Pre-mature withdrawal under normal circumstances is not allowed while in the case of the bankruptcy, loss, or deceased or direction from regulator/ court/ receiver, you can choose to apply for pre-closure. The penalty charges are applicable in such case. Auto renewal option is available under this scheme.

Axis bank has always given the option to its customer for all types of financial solution. The investment in the fixed deposit is one of the best ways to invest as it is risk- free. It is the best possible way to get good interest over the money without worrying about the safety of your wealth. The guaranteed return is assured and you have the option to fix it further.

Article Source: http://wishfin.blogspot.com/2017/03/invest-in-axis-bank-fixed-deposit-to.html

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Top 10 Mutual Funds: Which One Would You Choose?

Selecting the best mutual funds amongst the hoards of several mutual funds in the marketplace is a tedious task. However, choosing your best mutual fund for long term investment is not easy. There are various financial websites, blogs, financial advisors who will advise you on several parameters to rate the mutual funds. But if you consider the below-mentioned parameters, you could be harnessing the benefits from your chosen mutual funds.

  1. There are several mutual funds whose rankings are based on the CRISIL and Value Research Online. CRISIL assigns ranking on the classification such as Rank 1(good) to Rank(5) worst. Similarly, Value Research gives the rating on the basis such as 1-Star(worst) to 5-Star(good). Choosing the funds which have CRISIL 1 to 3 ranking and Value Research 5 star to 3-star rating is good. If you can see both these ratings for a mutual fund scheme and then decide, it could be your winning mutual fund.
  1. Invest on the basis of your risk taking appetite and time horizon. Longer the investment, the more potential it has for giving you better returns. It is better to stay invested from 5 to 10 years time horizon.  Also, your risk-taking appetite should be classified in terms of high-risk, medium-risk and low-risk appetite.
  • High-risk appetite investors prefer to invest in large cap funds, mid-cap funds, global funds, sector funds, etc. These are high-risk mutual funds, but give higher returns if invested in the long run.
  • Medium-risk appetite investors prefer to invest in large cap funds, hybrid funds, debt funds etc.
  • Low-risk investors prefer to invest in hybrid funds and debt funds.

  1. Select a better performer fund. Always check whether your fund is a consistent performer i.e. performing well in 1-year, 3-years and 5-years time. This ensures the regularity in giving you returns.
  1. Invest in that Asset Management Company(AMC) which has its Assets Under Management(AUM)>100 crores. AUM denotes the number of investors invested in a mutual fund scheme. Higher AUM indicates the maximum number of investors in a mutual fund scheme and lower AUM states a lesser number of investors so, ignore or avoid investing in such schemes. However, the new mutual funds having lesser AUM are yet to prove their potential in the stock market and thereby generating investors confidence.

Let’s see the classification of top 10 mutual funds which are picked on the basis of:

  • their highest performance in the last 5 years
  • CRISIL ranking and VRO rating as higher ranking/rating indicate better fund performer as compared to its various peers in stock market cycles.
  • the net worth of a mutual fund company whose net assets are worth more than 100 crores.

List of Top 10 Mutual Funds :

Mutual Fund Scheme Category Crisil Rank Assets Under                VRO              Management      Rating

 

Birla Sunlife Top 100 Fund Equity-Large Cap 2 ₹  2,393 crore      5      

SBI Bluechip Fund Equity-Large Cap 1          ₹ 10,934 crore      5

 

Birla Sunlife Equity Fund Equity-Multi Cap 1         ₹  3,770 crore      5       

 

ICICI Prudential Value Equity-Multi Cap             2         ₹ 15,588 crore      5

Discovery Fund

 

DSP Black Rock Tax Saver Fund Equity : Tax Planning       1      ₹  1,725 crore    5           

 

L&T Infrastructure Fund      Equity: Infrastructure 1 ₹ 268 crore         4

 

Birla Sunlife Monthly Income      Hybrid: Debt Oriented

Plan-II Wealth 25 Plans        Aggressive 1         ₹  1,540 crore      5      

 

Franklin India Low Duration Fund Debt: Short Term 2 ₹  2,667 crore     5       

Indiabulls Liquid Fund                     Debt: Liquid              1  ₹5,386 crore     5      

ICICI Prudential Long Term Gilt Fund Debt : Gilt 3 ₹  2,119 crore      3

 

On the basis of Returns

 

Scheme Name 1 Year(%) 3 years(%)        5 years (%)

 

Birla Sunlife Top 100 Fund        30.25 21.60 16.68

SBI Bluechip Fund        24.40 22.41 18.11

Birla Sunlife Equity Fund        43.11 28.55 19.88

ICICI Prudential Value                     27.72 28.58 20.96

Discovery Fund

DSP Black Rock Tax                     37.69 26.15 19.28

Saver Fund

L&T Infrastructure Fund       47.01 32.53 16.42

Birla Sunlife Monthly Income       23.05 16.73 13.12

Plan-II Wealth 25 Plans

Franklin India Low Duration Fund10.70 9.96 9.90

Indiabulls Liquid Fund       7.73 8.39 8.79

ICICI Prudential Long Term Gilt Fund16.79            12.53 9.19

 

Last but not the least, your investment on any of the above mutual fund scheme should be based on your financial goal, the essential criterion which determines the potential of generating higher returns from the scheme. You are advised to go through the objectives of your shortlisted mutual fund schemes in order to be focussed in selecting the right mutual fund scheme for yourself.

 

FD Interest Rates Offered by Top Banks

Fixed Deposit is an investment product in which the depositor invest the desirable amount in the bank for a fixed period of time. The bank pays the interest on the deposited amount remaining with the bank for a certain time period. This is an effective way to earn attractive returns on the money not in use. It is an optimum way of utilizing the idle funds and saving for the future needs. Also, investment in the fixed deposit is safe as little or no risk is associated with this type of investment. The depositor receives a fixed interest as promised to him at the time of opening a fixed deposit account. The interest yield is calculated at the fixed deposit interest rates prevailing at the time of booking the deposit.

What is FD Interest Rate-

The interest rate is the percentage at which the returns on the fixed deposits are calculated. The percentile on deposited amount is added to the initial amount and is paid at the time of maturity of the deposit. These rates are predetermined by the bank and vary according to the tenure of the investment. The rates also differ from institution to institution. Therefore, before opening an FD account the depositor must check and compare the rates of various banks. The rate of interest offered on fixed deposits by various banks are given below:

nre-fixed-deposit

FD Interest Rates-

State Bank of India (SBI): The rate of interest offered by SBI on the term deposit of 7 days to  45 days to the regular citizen is 3.75% p.a. and to senior citizens is 4.25% p.a. It pays an interest of 4.25% and 4.75% to regular and senior citizen respectively on the deposits remaining with the bank for the period of 5 years to 10 years.

Indian Post Office: The candidates can book the deposit for the period of 1 year, 2 years, 3 years and 5 years at Indian Post Office. The interest rate on these deposits variates from 7.00% p.a. to 7.80% p.a. and the deposit account can be opened with the minimal amount of ₹ 200 and its multiples thereafter.

HDFC Bank: The HDFC Bank provides fixed deposits for the period ranging from 7 days to 10 years. The rate of interest on the deposits made for the period of 7 days to 14 days is 3.50% p.a. and for the period of 2 years to 10 years is 6.00% p.a. The highest interest offered by the bank is 6.90% p.a. at the term period of 1 year 1 day to 3 years. Also, the bank provides additional interest of 0.50% to the senior citizens.

Axis Bank: The Axis Bank offers the interest rate of 3.50% p.a. to 7.00% p.a. on the deposits remaining with the bank for the period of 7 days to 10 years. It offers an extra interest to senior citizens on certain tenure.

ICICI Bank: At ICICI Bank, the customers can book the deposit for the tenure of 7 days to 10 years with premature withdrawal facility and without premature withdrawal facility. The interest rate on both the types is different. The interest rate on fixed deposit with premature withdrawal facility made for the period of 7 days to 14 days is 4.00% p.a. The rate prevailing on the term of 5 years 1 day to 10 years is 6.50% p.a. However, the interest of 5.25% p.a. – 6.30% p.a. is paid on the deposits without premature withdrawal made for the period ranging from 7 days to 10 years. The senior citizens are entitled to receive an extra interest of  0.50%  on the deposits booked with the amount less than ₹ 1 crore.

What are the factors that help in determining the fixed deposit rates-

The market forces play a vital role in deciding the rate of interest. Various economic factors contribute in the determination of return rates and they are as follows:

Factors Affecting FD Interest Rates :

  • Policies incorporated by Reserve Bank of India
  • Recession
  • Inflation
  • Current State of Economy

Article Source: https://goo.gl/MJxvo7

Criterion to Compare Mutual Funds

Every investor would be interested in knowing which is the best performing mutual fund as of now. The reason behind this is they would like to assess whether the scheme they are choosing or continuing with are already the best performing mutual fund schemes or not. If it is not worth the performance, they would like to switch their investments from the existing scheme to the currently best performing mutual funds.

You should take a note that best mutual funds do not mean the best in returns, but the one which suits your risk profile and goals and the one that fits in your peer group. The biggest mistake which many mutual fund investors make is selecting the mutual funds on the basis of recent performance and also depend on the star ratings, no doubt  can be one of the factors to consider. However, there are many criteria which needs to be looked at before finalizing your mutual fund portfolio.

funds

Know the Performance Ranking

The performance ranking among the schemes need to look at is the first thing to do. More than the recent or long-term performance, it is necessary to check the quartile ranking for the scheme. The quartile ranking shows how the fund has performed during the quarter to quarter basis amongst its competitors. In quartile ranking, the quartile is composed of 25 percent of peer group schemes. So one may pick the scheme which has remained in top quartile maximum times. If you observe the investment schemes ranking going below 3rd quartile in a series of consecutive quarters it indicates you to exit from the scheme. You can check these rankings from the factsheets of several mutual fund companies and also check their research websites.

Assess the Ratio Analysis

Mutual funds risk can be measured with the risk-return ratios and standard deviation, Sharpe ratio, alpha ratio are such ratios to name a few. When you check the Alpha ratio which is the performance ranking of the fund manager, clearly describes what surplus or deficit the fund manager has generated from a specified portfolio as compared to the benchmark. The positive alpha generated by the fund manager in last few quarters you should assess in order to know whether the fund is maintaining its consistency or not.

Total Expense Ratio

The expense ratio is a critical factor to be assessed at while choosing your mutual fund scheme. All fund management and distribution expenses are rendered by the scheme. It means higher expense ratio will impact the fund’s returns. Although the total expense ratio comes under the regulations of SEBI, still the lower expense ratios are preferred until some exceptional returns are generated by paying higher expenses for managing the fund.

The tenure of Fund Manager and Experience

Fund manager plays an active role in the mutual funds’ performance. Since, managing a scheme is a full-time job so it comes under the discretion of the fund manager and his experience and wisdom in picking up the best performer. It is advisable to you that you should know who is the fund manager of the scheme and about his past record. You should also consider the past performance of other funds which is managed by him. If there is a change in the fund manager of any scheme, don’t lose hope. Just keep a track on his performance by checking at alpha and quarter-to-quarter basis performance. If you see that with respect to a change in the fund manager there has been a noticeable effect on the fund’s performance which does not accommodate your risk appetite then you can decide to quit from the scheme.

Asset Size of the Scheme

This criterion is different for equity and debt schemes. In equity, the stipulated asset size is hundreds of crores whereas in debt, it should be thousands of crores as the worth of investment per investor is higher in debt funds. Since, 90% of total assets under management(AUM) of the mutual fund industry are invested in debt funds, subsequently, constitutes a considerable asset size in AUM.

Lesser AUM in any scheme proves to be risky as you are not aware of who the investors are and what quantum of investments are made by them in this particular scheme. If a big investor makes an exit from the scheme, it makes a heavy impact on the overall performance of the scheme which ultimately falls on the remaining investors of the scheme. Those schemes with larger AUMs tend to minimize their risk.

After going through the above parameters, it becomes the duty of a good fund manager to automatically  deliver the better performance of its scheme which in turn demands to focus towards improving the quartile ranking and generating a good alpha. Also, the higher scheme assets will tend to reduce the total expense ratio of the scheme. Hence, the selection of current funds should be based out on their every quarter or half yearly performance.

Article Source: https://onmogul.com/stories/criterion-to-compare-mutual-funds

Best Fixed Deposits Schemes that can Hike your Earnings

There is no determined age and time for saving the money. Whenever whoever has the surplus amount should start saving. This is because it is a good practice to save for the rainy day. The amount saved today can be utilized in the times of need. Thus, saving for future is considered as an act of financial prudency. Not only savings but the way you save is of equal importance. This is because the amount you pull out now from your expenditure and store in piggy banks or lockers will be inadequate to meet your future requirements.

Therefore, saving through investment is considered the idle way of planning for future. While a lot of people think that investments involve risk bearing, there are ways of risk free investments too. Most prominent among them is fixed deposits.

fixed deposit

It is the safest mode of engaging the idle money. In fixed deposits, the invested amount is locked-in for a determined period of time and yields interest throughout the period of investment. Anyone can invest in the fixed deposit as there are no rigid investment criteria. Moreover, the banking institutes proffer multiple fixed deposits schemes to cater the diverse financial requirement of the people. The depositors can select the scheme that best suits their investment purpose and helps them attain the financial objective.

The fixed deposits schemes offered by various banking institutes are mentioned below:

State Bank of India

The bank has drafted multiple fixed deposit schemes to cater the variant needs of the people. The investor has the flexibility to decide and invest in the scheme that he considers is best for him. The fixed deposits schemes offered by the bank are:

SBI MODS – Multiple Option Deposit Scheme (MODS) is the deposit plan in which the FD account holder has the freedom to withdraw the amount in multiple of ₹ 1,000. The remaining amount in the deposit account yields interest at the same interest rate. The minimum amount required to open the account is ₹ 10,000.

SBI Annuity DepositThe account under annuity fixed deposit scheme is opened with the minimum amount of ₹ 25,000. There is no maximum limit on the deposit. The deposit can be made for the period 36, 60, 84 or 120 months.

SBI Reinvestment Plan – This deposit can be opened with the minimum amount of ₹ 1,000 for the tenure ranging from 6 months to 10 years. In reinvestment plan, the interest receivable is quarterly compounded and added to the principal amount. Then the interest is calculated on the new principal and is paid at the time of maturity.

SBI Tax Savings Scheme The customer can avail the benefit of saving taxes on the fixed deposits by investing the minimum amount of ₹ 1,000 for the minimum period of 5 years. However, the maximum investment amount is limited to 1,50,000.

HDFC Bank-

The HDFC bank has proposed two deposit schemes to promote the habit of saving in the people. The schemes are as follows:

Regular Fixed Deposit – The customer can avail the benefit of regular interest on the investment made with the minimum amount of ₹ 5,000. The account can be opened for the period ranging from 7 days to 10 years. The candidates opening the account can easily liquidate the deposit and appoint a nominee. The account holder can also avail the sweep-in & super saver facility on deposits held in a single name.

5 Year Tax Saving Fixed Deposit – Under this scheme, the potential depositor can open an account with the minimum amount of ₹ 100 and in multiples. The maximum investment amount is restricted to ₹ 1,50,000 per financial year. The deposit can not be liquidated before the lock-in period of 5- years which is the maximum tenure.

ICICI Bank-

The ICICI Bank provides the option of investing the money in different fixed deposit schemes. These schemes include the money multiplier scheme and tax saver scheme. Apart from this, the bank has incorporated types of plans that are as follows:

Traditional Plan- Under this plan, the interest is receivable at the monthly and quarterly intervals.The account holder can select the interest payout frequency as per his need. The tenure for this plan lasts from 7 days to 10 years.

Reinvestment Plan– The candidates opting for this plan have to make an investment for the minimum period of 6 months. Unlike the traditional plan, the interest in this scheme is not paid out but is compounded quarterly and reinvested with the principal amount. This compounded interest is rolled out at the time of maturity of the plan.

Documents Required-

Certain documents are required at the time of booking a deposit. The list of requisite documents is given below:

ID Proof & Address Proof:

  • Passport
  • PAN Card
  • Driving Licence
  • Voter ID
  • Government ID Card
  • Senior Citizen ID Card
  • ID Card Issued by Post Office
  • Bank Statement with Cheque
  • Telephone Bill
  • Electricity Bill

 

Article Source: http://hightoken.com/best-fixed-deposits-schemes-that-can-hike-your-earnings/

Increase your wealth with Axis bank Fixed Deposit

Do you keep the money in your savings account? Do you want to increase your money by investing? Now you can earn more interest on your deposited money and get the good returns. This is possible if you invest in the Axis bank fixed deposit. You can open your fixed deposit account and the put your money in it for the fixed period of time and the bank pays the interest rate over it. The axis bank fixed deposit is one of the safest modes of investing your money to get the high returns. Axis bank is one of the trusted banks in India and it is the third largest private sector bank in India. The people generally refrain from the investments because of the risk that is involved in it. The fixed deposit is devoid of any such risk factors and is very safe. The interest rate accrued on the money is also fix so you are assured of the returns after the fixed time period.

fixed deposit

You can open the fixed deposit account with Axis bank and the minimum amount require to open the fixed deposit is ₹ 10,000 and there is no maximum limit. The fixed deposits are also known as the term deposits and one can invest their money in short term and mid to large term as well. The tenure of the fixed deposit varies from minimum of 7 days to the the maximum of 10 years. There is also the option of reinvestment fixed deposit. The interest rate on the deposited amount is compounded quarterly if the time period is less than that of the 6 months. You can easily transfer your funds from the savings account to a fixed deposit to earn the higher rate of interest.

Eligibility Criteria Required:

To have a fixed deposit account you need to fulfill certain criteria and then you will be eligible to deposit the amount in the bank to earn the good rate of interest from them. Below mentioned individual or group are eligible for a fixed deposit

  • The applicant should be the Resident of India.
  • Hindu undivided families
  • Sole proprietorship firms
  • Partnership firm
  • Private limited companies
  • Trust accounts

Documents required:

The documents required by the individual, Hindu undivided family, and sole proprietorship while applying for the fixed deposit are:

  • A coloured photograph
  • Passport/ Driving License
  • Last six months bank account details

Documents required from the trusts for a fixed deposit are as follow:

  • Photographs of the member operating the account.
  • Copy of the Trust Deed.
  • Copy of Registration Certificate.
  • Copy of the resolution of trustee authorizing the member to operate and open the accounts.

Documents required from the  association/ clubs for the fixed deposit are as follow:

  • Photographs of the member operating the account.
  • Copy of the Bye- laws of the association.
  • Copy of the resolution of trustee authorizing the member to operate and open the accounts.

Documents required from the partnership firm for the fixed deposit are as follow:

  • Photographs of the persons operating the account.
  • Partnership Deed
  • Letter from the partners approving the person to operate and open the account.

Fixed deposit Interest rate in Axis bank:

  • 7 days to 45 days the rate of interest is 3.50%
  • 30 days to 45 days the rate of interest is 5.50%
  • 46 days to 3 months the rate of interest is 6.00%
  • 3 months to less than 6 months the rate of interest is 6.25%
  • 6 months to less than 9 months the rate of interest is 6.50%
  • more than 9 months to less than 1 year the rate interest is 6.75%
  • 1 year to less than 2 years the rate of interest is 7.00%
  • 2 years to 10 years the rate of interest is 6.75%

The fixed deposit interest rate in Axis Bank for Senior Citizens:

  • 7 days to 45 days the rate of interest is 3.50%
  • 30 days to 45 days the rate of interest is 5.50%
  • 46 days to 3 months the rate of interest is 6.00%
  • 3 months to less than 6 months the rate of interest is 6.25%
  • 6 months to less than 9 months the rate of interest is 6.75%
  • more than 9 months to less than 1 year the rate interest is 7.00%
  • 1 year to less than 2 years the rate of interest is 7.50%
  • 2 years to 10 years the rate of interest is 7.25%

If you want to invest and get the assured money, the fixed deposit is one of the best ways to do so.  And by opening Axis bank fixed deposit, you will be able to get all the desired features and benefits. This will increase your deposited money without any much hassle.

Understanding the Fixed Deposit Interest Rate and Factors Affecting it

The fixed deposit is the type of investment product in which you deposit a certain amount of money and fix it for the time period so as to get the interest rate on it. The fixed deposit is the type of secured and safe investment which comes up with the guarantee good returns. The fixed deposit can be done for the small term or mid to large term. The time period for which you can deposit the amount can vary from 7 days to 10 years. The fixed deposit interest rate is also high as compared to the interest rate your money gets in the savings account. It is one of the best ways to get the good return in the most secured way.

The fixed deposit is very popular investment product as it provides the security of returns promised. The investment generally involves risk whereas the fixed deposit is devoid of any such risk factors. Also, you have the prior idea about the amount you will be getting after the maturity period. The fixed deposit is one of the safest and easy to make the type of investment.

fixed deposit interest rates

The fixed deposit has many other advantages as well. If you urgently need the money then you don’t have to break your fixed deposit. You can directly avail the loan from the lender against the fixed deposit and meet your requirements. The fixed deposit falls in the tax deduction scheme under the section 80 (C). The principal amount up to ₹ 1,50,000 deposited for 5 years comes under the tax exemption. Whereas the interest rate gained over the amount is taxable. Also, there is special provision for the senior citizens where the banks pay more interest rate on the deposited amount than that of the others.

Factors affecting the Interest rate of the fixed deposit scheme:

There are many factors that are responsible for the change in the interest rate of the fixed deposit scheme. Few of the factors that affect the fixed deposit scheme are mentioned below:

RBI Regulation-  There are changes in the monetary policies by the governing body RBI like the change in the repo rates and CRR. These factors accordingly change the interest rate of the fixed deposit.

Demand and supply of credit– If there the demand of the credit is more then the rate of interest on the fixed deposit also increases. To meet the demand of credit the banks increase the interest rate so that the number of people will opt to invest their money and as a result, the banks will be able to get the money from the depositor and they can fulfill the demand for the credit. Similarly, if the demand for credit is low the interest rate simultaneously decreases.

Liquidity– The more the liquidity the interest rate tends to decrease and vice-a-versa. The liquidity in the system is the availability of the cash that is required to meet the obligations. If the amount of cash in the banks are more then the rates are decreased while if there is the shortage of the cash in the banks then rates are increased to lure the people to invest in fixed deposit so that liquidity increases to meet the demands of cash.

Inflation– Inflation is the situation in the economy when the rates of the commodities become dearer and there is the fear of money devaluation. In such a situation the rate of interest increases to attract the depositor for the term deposits.

To get the maximum outcome from the fixed deposit interest rates there are certain things that should be in your mind. The principal amount deposited should be selected carefully. Also, you should see the interest rate carefully and compare the rates offered by the different banks before opening the fixed deposit account. You can compare the rates online which will be convenient for you rather than physically going to different banks to know the rates. The selection of the tenure of fixed deposit is also important as the rate of interest directly depends on it. You should read all the penalty clause before opening the account. Read all the documents carefully and look out for the hidden charges if any. 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.