Timely investments in fixed deposits are an efficient way of boosting your savings. Unlike a regular savings account, a fixed deposit secures your money and helps you earn higher returns. You can start a fixed deposit with a bank, corporate institution, NBFC or even a post office. But, to ensure that you make the most of this investment option, it is crucial to determine the right time to invest.
Here is what you need to keep in mind before you go ahead with your investment.
Consider your current income
Before you decide on the amount you want to invest, it is crucial to assess your current income. If most of your income is being used to pay off bills, you will first need to accumulate the funds you wish to invest. Instead of immediately deducting the amount from your current income, plan and keep aside a part of your income every month until you’ve accumulated your desired amount.
Be aware of taxable income
The interest earned on a fixed deposit is not tax-free, and when received, it is adjusted for tax. Tax is applied to annual interest earned above Rs. 10,000. It is thus important to be aware of the taxation policies before investing.
Additional Read - A Comprehensive Guide about Post Office Saving Schemes?
Do your research
It is always wise to do your research before you go ahead and invest. Keep an eye on interest rates which will help you understand when they’re high and low. You can thus avoid investing at a lower rate of interest. When the rates are high, invest more significant amounts for a longer period of time. Also, bear in mind that NBFCs offer better interest rates than banks. For example, the Bajaj Finance Fixed Deposit offers an interest rate of up to 8.85% p.a. in addition to other benefits such as high credibility and an easy online application process.
