Home Finance Best way to invest in a fixed deposit 

Best way to invest in a fixed deposit 

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Mrs. Niti Arora is a science teacher in a higher secondary school. She likes to manage her money on her own. The following are the investment options that she has chosen:

  1. Buying 1 gm gold every month
  2. Investing Rs. 1,000 every month in a post office recurring deposit
  3. 2,500 annual premium on her life insurance policy
  4. Keeping some cash aside in her savings account in a well-known bank

Since Mrs. Arora has accumulated Rs. 1 lakh in her savings account, she asks a colleague for advice on investing this amount. She is highly risk-averse, and hence, the security of investment and a stable, assured return is high priority for her.

The colleague advises her to open a fixed deposit account. No wonder Mrs. Arora is very happy with this investment avenue. Fixed deposits are preferred traditionally by Indian investors. Recent data from the Reserve Bank of India indicates that over 65% of Indian households’ savings are parked in fixed deposits.

Fixed deposits are easy to understand 

You just have to choose one amongst the many reputed banks in India. You may have to fill a form online or offline, submit your PAN and other details, decide your investment amount for a fixed period of time; and you would have successfully invested in a fixed deposit at a specified interest rate.

Best way to invest in a fixed deposit

  • Invest in a fixed deposit online

Service providers, including banks, have made investing in fixed deposit online easy. Most service providers have a completely paperless and online process for fixed deposit account opening these days.

Mrs. Arora did her research and found out the things to expect when starting a fixed deposit account online. Those are-

  1. She should be ready to produce her basic details such as:
  2. Her phone number
  3. PAN details
  4. Her date of birth
  5. Her email ID
  6. She should comply with the Know Your Customer (KYC) process mandated by law
  7. She should be ready to choose the amount she wants to invest and the time period of the investment.
  • Invest in a fixed deposit offline

Mrs. Arora enquired about the offline process as well. The process involves visiting a bank of her choice with required documents like

  • Her identity proof
  • Her address proof
  • Her photograph
  • Filled out fixed deposit opening form

Even though both online and offline processes for investing in a fixed deposit are easy and hassle free, Mrs. Arora chose the online option as she thought it was more convenient for her. She invested Rs. 1 lakh for a duration of 4 years and 11 months. She compared the interest earned and accumulated for a year with interest earned and paid on a monthly basis.

Being salaried, she didn’t want regular interest payments and chose the cumulative option and made her investment.

She found the entire process of investing in fixed deposit online very easy to understand and execute. She was also able to calculate various possible investments for different tenures and understood the return on investments thoroughly, and she found the entire process quite transparent.

You can also be smart like Mrs. Arora and make investments literally at your fingertips by opting for online services and seeking help from financial experts. A professional would be able to help you out with your investment plans, suggest different avenues like mutual funds and stocks based on your profile and help you meet your financial objectives.

Reach out to one today!