New Delhi: Whenever it comes to investment, FD is preferred. But how many years there are advantages in doing an FD and for how long it would be an disadvantage.
Most people put money for several years at once, but it can also cause damage. If you are doing FD, then do it for a short time rather than for a long time.
Let see why doing a FD is a benefit for a short time.
Advantage in getting 1 year FD
There is a disadvantage in getting a long-term FD that if the interest rates increase during that time, then you will not get the benefit. It may also happen that during that time, another bank will give some kind of special offer, which you will not get the benefit.
Suppose you have FD for 5 years and interest rates have increased in the second year, then you may be at a loss. Yes, if you see a big difference in the interest rate of FDs of 1 year and longer duration then you can of course choose long term, but such offers are rarely available.
Not only this, there can also be a logic of getting a long-term FD, that is, if there is a good offer, then you will break the FD, but banks do deduct some charge which is usually 1%.
That is, if you had FD for 3 years at the rate of 5%, then after breaking the FD, after charging 1%, you will get benefit at the rate of only 4%.
How to earn maximum profit in FD?
Note that if you look at the interest rates of banks, there is not much difference in FDs of one year and above. In such a situation, you should get an FD in your bank of choice for 1 year now.
Before maturity, keep watching whether any other special offer is being received in other banks and in your own bank or whether there is a change in interest rates.
If you get more interest elsewhere then invest the money there. That is, in this way you can earn maximum interest on FD with all the offers.