Ways To Improve Returns On Your Fixed Deposits

A Fixed Deposit is usually considered a safe investment option. It enables you to get assured returns on your savings. Apart from this, an FD is also considered one of the easiest investments in India. However, when opening this Term Deposit, it can be a good idea to maximize the returns. Suppose you are not sure how. In that case, this article points out various ways to improve the returns on your Fixed Deposits.

About FDs

An FD is an investment scheme enabling you to deposit money for a fixed period at a pre-determined interest rate. When the deposit matures, you get the deposited amount and the interest earned on it. Several banks offer this investment option. You can also easily open and manage your FD online, anywhere and anytime, using Mobile or Net Banking.

Tips to maximize returns

When opening a Fixed Deposit, you can use the following methods to maximize your returns:

1. Choose higher interest rates

The FD rates banks offer may vary according to the tenure you choose. It may also be different based on the amount you invest. Apart from this, the interest rate usually differs across banks. Hence, when opening an FD, compare various interest rates to maximise your returns.

2. Utilise laddering

This strategy allows you to opt for various tenures with different interest rates and open multiple FDs. This helps you divide a sum into various FDs with multiple maturity dates. This could be a useful way to get maximum returns for your deposits. Splitting the sum also enables you to take care of your liquidity needs. For example, if you require more liquidity, deposit more money in shorter tenures.

Since the Fixed Deposit rates keep changing, when one FD matures, you could take advantage of a higher interest rate and reinvest the sum.

3. Opt for a Cumulative FD

Opt for a cumulative fd

Cumulative FDs tend to maximise your returns. Here, the interest you earn is reinvested along with your principal amount. This could lead to higher returns when your FD matures.

4. Open FDs for your parents

Some banks offer higher interest rates on certain FDs when you are a senior citizen. So, if you have older parents who are senior citizens, you could enjoy higher interest on Fixed Deposits in some cases.

5. Be aware of changes in interest rates

Since interest rates on FDs could change over time, it is wise to stay informed when looking to maximise your returns.


An FD is a safe and stress-free avenue to deposit and grow your money. It is also easy to open, and you can conveniently book an FD online using the Banking app or Internet Banking facility your bank offers. Apart from this, if you are looking for ways to maximise your returns, you can efficiently utilise the above-mentioned tips.

Originally posted 2023-12-06 04:42:03.