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A Brief Guide to Growing Your Money with a Fixed Deposit

Fixed Deposit

Fixed deposits have perpetually remained a popular form of investment amongst new and seasoned investors alike. Unlike the latest forms of investment like cryptocurrency, the notion of fixed deposits has been around us for decades now. The immense popularity of fixed deposits owes much to the low to moderate risk patterns that come with it, unlike most forms of investments that offer a relatively high risk.

On my last team outing in Bangalore, I came to know from an acquaintance how one can significantly grow their money with fixed deposits. He told me how fixed deposits offer investors a sense of guaranteed returns, alongside providing ease modes of opening and liquidating their financial resources. 

In this article, you will find a comprehensive guideline, taking you through the various channels you can adopt to grow your money with a fixed deposit. So, check it out:

1. Start by looking beyond your traditional bank fixed deposits.  

Particularly in countries like India, the notion of corporate fixed deposits exists as a nascent concept in contrast to those offered by other banks. The corporate fixed deposits are known for offering investors approximately 1 to 4% higher rates of interest than your regular fixed deposits.

Corporate FDs are usually provided by NBFCs or by other different financial corporations who have the power to issue a fixed deposit. Though the 1 to 4% higher rates of interest may not initially seem as something big, you will be astounded when you observe your returns over the maturity period. It is therefore in the long term rather than the short time that you can start noticing the difference with corporate fixed deposits.

Furthermore, when your corpus of investment is also high, it will consequently affect your returns on the investment, increasing it evermore. Thus, investing in corporate fixed deposits can be a great way to start your investment plans and successively wade past the high inflation rates of the present times.

2. Assess fixed deposit issuers primarily based on their credit ratings.  

Credit ratings issued by important global bodies like CRISIL and ICRA serve as important indicators of the sense of reliability and authenticity of the fixed deposit. As in case of any other rating, here also you need to look for those with a higher rating. In this way, you can easily find the most reliable platform for your fixed deposit seamlessly.

However, this process does also come with its own disadvantages. Usually, the fixed deposits with a higher credit rating tend to provide investors with a slightly slower return on their investments in stark contrast to the low-rated and comparatively risker ones. 

But ultimately, fixed deposits are where you are going to invest your money. Thus, nothing comes more important here than keeping your investment secured. Investors should therefore prioritise the safety and reliability of the platform to maximise their investments for the long run. 

In this way, investors can choose fixed deposit platforms with a high credit rating and assess them ultimately based on their own investment goals and risk appetite.

3. Make your investments in fixed deposits when the interest rates are high.  

Often there are various changes and modifications made into the investment processes as banks may either increase or decrease their interest rates. As may be easily understood, it is always best for investors to invest in their fixed deposits when banks are offering a comparatively higher interest rate. In this way, investors can reap better returns on their investments following their maturity rate.

However, while investing at times when interest rates are high is an advisable investment strategy, there is still something else that investors need to ensure. It is important that they remain cautious and stay clear of banks offering an excessively high rate of interest. In this way, they can prevent themselves from getting into a higher risk.

At present, most banks are providing about 6.5% to 7.5% interest rate per annum when it comes to fixed deposits with a tenure of at least 1 to 3 years. So, investors can now opt in for this scheme and slowly start to grow their finances over time.

4. Plan your bank fixed deposits by choosing the right tenure.

It only makes sense to invest in your bank fixed deposits for a long duration when the interest rate offered for the same is relatively higher than usual. Keep in mind that compounding is a judicious way to beat the inflation rates of the present times. However, at the same time, it is essential for you to ensure that your investment decisions stay in line with your financial goals and liquidity requirements.

In case you have a short-term financial aim, which can easily be fulfilled in a few months or wish to establish an emergency fund, long-term FDs are not for you. Instead, it is better for you to invest in short-term fixed deposits with a rather cumulative plan. When you choose a longer maturity and withdraw your investments early, it may make you incur a penalty.

In contrast, when you have a long-term financial objective, it is more advisable for you to choose a bank fixed deposit that offers a longer period of maturity and comes with a cumulative plan. But, at the same time, you need to keep in mind that the interest rates are usually lower for longer maturity periods in contrast to the short-term ones.

Now, when it comes to senior citizens who wish to attain a regular source of income, it is best to choose something from between monthly or quarterly interest payments. Usually, these payments directly enter their bank account.

In this way, based on your individual needs, you need to understand and choose the right tenure for your fixed deposit.


So, instead of rushing your way into investing in fixed deposits, it is best for you to assess your present situation and understand your needs and desires. In this way, you can choose the right fixed deposit for yourself and draw advantage of it.

Author Bio: Aadhira Gopal works as a content writer at https://breakout.in. An avid fan of games and escape rooms, she enjoys reading magazines and exploring different themes in stories and articles. Aadhira Gopal is rigorous with her work ethic and dedicated to researching new content material every day for writing good quality pieces. Tea is her favorite companion when she is taking a break, and while she is a book lover, you can also find her matching beats to music now and then.

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