How To Get High Returns on Fixed Deposit Schemes in 2020

When you invest in fixed interest rate deposits, you know that you have no control over the rate of interest. So, the usual route to get high returns is to compare the interest rates across all FD issuers. You will naturally select the one that offers the best FD rates in 2020.

How To Get High Returns on Fixed Deposit Schemes in 2020

However, it would make more sense if you also find a way to maximize the high returns. This way, you will be able to grow your investment and earn more income than what seems obvious. Let’s see how you can do this.

Opt for Cumulative FD

A cumulative FD leverages the power of compounding to multiply your money. The accrued interest is reinvested on the principal amount every year. So, your interest also earns interest, thereby increasing your returns. When the FD matures, you get the cumulative principal and interest.

The non-cumulative FD is recommended only when you need monthly, quarterly, half-yearly or annual payout for a steady stream of cash flow.

Use Online FD Calculator

An online calculator is the best tool to determine returns on fixed interest rate deposits. It automatically computes the results at the click of a button and within a few seconds. All you need to enter is two basic details – the FD amount and tenor.

It is advisable to use reliable and user-friendly online calculators like that of Bajaj Finance when you want to learn how to calculate FD interest rate with precision. It gives a complete picture of what kind of returns you will get on FD and whether you should make adjustments in your investment to maximize the returns.

Seek TDS Waiver

In case you fall under a low-income bracket or are a senior citizen or housewife, you should submit Form 15G or 15H as applicable to get TDS waiver. This is also another way of ensuring high returns.

Use Laddering Technique

Laddering is an investment strategy which allows you to invest in multiple FDs with varying interest rate and tenor. For example, you can invest Rs. 2 lakhs in four FDs of Rs. 50,000 each with different maturity periods instead of putting the entire money as a lump sum. This will give you easy liquidity to meet your short-term goals or during emergencies. You can withdraw the money from one FD while letting other FDs grow and earn high returns.

When comparing best FD rates 2020, you should consider Bajaj Finance FD which offers high-interest rate up to 7.85% interest rate. An online FD calculator can help you get an accurate picture of returns during the FD comparison. To earn high returns, you should also preferably opt for a cumulative FD which multiplies your investment using the power of compounding. If you fall under low-income bracket, make sure to submit Form 15G or 15H to get TDS waiver on FD interest income. It is also advisable to spread your FD amount across one or more FDs with different maturity dates using the laddering technique. All these tips can help you get high returns.

An FD calculator India reveals the exact returns and interest that you will be earning after investing in an FD. Also, you need not pay any fees for using them. Therefore, it enables you to compare multiple FD plans in a matter of minutes. However, due to the present economic crisis, banks have reduced the interest rates of their FDs.

To continue earning at a high-interest rate, you can invest in Company FDs such as Bajaj Finance FD which offer interest rates up to 7.85%. Alternatively, you can invest in a Systematic Deposit Plan which enables you to grow your savings by depositing just Rs. 5,000 every month; whilst enjoying all the features of a regular fixed deposit investment.

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