How to get higher rate of Interest from a Bank FD or CD

We all know that fixed deposits(FD) in bank are a safe bet and provide better returns than savings accounts. Usually FDs have 3 to 4 percentage more returns than the savings accounts. Another advantage of FD is that usually they are safe and you almost have guaranteed returns. Many people who do not understand stock markets put their money in FDs.

Till few years back FDs used to return more than 12% in India and people put all their money in the FDs. Due to economic policies it is not longer possible for the banks to provide such high interest rates. Now currently in India the rates are around 7.5% for FDs which is quite less if you put all your money here.

Simple way to have more interest rates for your FDs

Instead of bank FD go for company FDs. They will provide you more interest rates. Usually companies raise money through public issues, but certain times they go directly to public and offer them Fixed Deposits. Since people trust the banks more than the companies, therefore the FDs from companies offer more interest rates.

It is quite easy to get around 3 to 4 percent more than the bank rates. Last year I had some spare cash and did the same. You should be careful while choosing the company. Just make sure that they have good track record to ensure the safety of your investment. For example TATA is is trustworthy company in India and going for FDs offered by them is a safe bet.

You need to keep in mind that some of the FDs may have a lock in period and you may not be able to withdraw before that period.

Some companies offer FDs to only their shareholders or offer them slightly higher rates. If you want to go for those companies but do not want to purchase too many share then go for only one share of the company and then purchase the FDs.

Investing the money in FDs over longer period have superior returns and managing our money wisely will ensure financial freedom to us and our family.

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