Investing in one FD is more profitable than investing in multiple FDs. Know the details
New Delhi: Earning money depends on hard work and dedication. But making the right decision to invest money plays an important role. To strengthen your financial situation, the investment goal must be clear. The share market, equity mutual funds, PPF, and government savings schemes are the means for investment. However, apart from this, people are more loyal to FD schemes.
Fixed deposits are considered one of the safest investment options in India. Because in this, the capital remains safe and the returns are predetermined. The interest rate of an FD is not affected by market volatility. In addition, according to DICGC Insurance, deposits up to Rs 5 lakh are protected. This gives additional hope to the investor. So let’s know whether it is better to invest in one FD or if it is more profitable to invest in multiple FDs.
One or multiple FDs? Suppose you have Rs 7 lakh, should you make one FD of Rs 7 lakh or seven FDs of Rs 1 lakh each? According to experts, the total amount available at maturity will be the same in both cases.
Advantages of a large FD: You only have to make one deposit. It will have one maturity date, and the interest is also linked to one place. It is easy to track the investment. The interest rate remains fixed, locking the money, and the investor can earn good returns till maturity without any hurdles. A large FD can be a peace of mind option, especially for retirees or investors who already have an emergency fund in place.
Disadvantages of a large FD: The biggest problem with a large FD is when you suddenly need money. If you only need Rs 50,000, you won’t be able to withdraw that much. You will have to break the entire FD. This will attract penalties on the entire amount and reduce the overall return.
How you should invest in an FD: There is no one formula for investing in an FD. If you have an emergency fund, need to invest without any hassle, and you don’t need the money all the time, then an FD will be right for you.
If you want flexibility or want to withdraw money without any loss when needed, then multiple FDs can be said to be more beneficial.
