The lure of high interest rates and stability draws several investors towards fixed deposits, which are one of the most preferred low-risk investment alternatives. Though fixed deposits are devoid of risks, hasty investments may hamper your ability to maximise your gains from the investment.
Here’s a brief lowdown on common investment mistakes fixed deposit investors must avoid:
1. Lack of investment goals: Having no prior investment goals before investing in a fixed deposit is like walking in a dark alley, without any sense of direction. Here’s why you need to be clear about your investment goals beforehand:
- Select the right scheme, which is dovetailed with your investment plan
- Align other saving plans along with your FD, so that you can have a diversified investment portfolio
- You can decide which benefits of FD you want to capitalize on. Some of these benefits include:
- Flexible tenor
- Short-term gains
- Fund for emergencies
- Optimize your savings in the right way
- Increase your preparedness for future expenses
It is always important to have an objective so that you can plan cleverly for the future and select the right scheme. With Bajaj Finance FD you can get flexible tenor, high rates of interest and hassle-free documentation to make life easier for you.
2. Not performing relevant research: Investing in any scheme requires intensive study of the market and the various interest rates. Once you have extensively studied the market on a large scale, only then should you consider investing in FDs.
Research also helps you narrow down and choose an option according to your requirements. It enables you to compare various schemes and choose the correct ones. You can also read helpful investment guides or books, so you can plan your investments accordingly.
Additional Read: Where to invest for higher returns on your fixed deposit
3. Choosing only a single option: A single investment is less likely to give you high amounts of returns so it is best to choose more than one scheme. Consider investing in other options as well, and have a diversified portfolio. In case you’re eyeing FD as your only investment vehicle, invest in FDs with different tenors. It will help you enjoy both – high returns from long-term FDs and quick, short-term gains.
4. Not monitoring and recording your investment: At every stage of the investment, it is important for you to have a clear record of the returns and the account details. Pay attention to your bank statements and passbook entries of the fixed deposit account.
5. Not considering inflation: Inflation is the rise in the rates of commodities and services. Inflation impacts the overall value of money over time. Hence, before investing, it is important to consider inflation and plan and invest a sum that is likely to be valuable in terms of the value of money after the tenor. You can also use Bajaj Finance FD Calculator, to help you calculate the accurate returns on your investments.
6. Investing in insurance simultaneously: No matter how many FDs or investment options you have, it is always necessary to keep aside an insurance policy, apart from investments. These policies help secure your family and loved ones in unforeseen events.
This way, in cases of emergency, you always have an insurance policy as a backup option. This will ensure that you do not have to break your deposits or other investments in case the urgent need for cash arises.
If you avoid these mistakes, it is likely that you could gain more rewards from your investment.
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