New Delhi: Fixed deposits (FD) have always been considered a simple and secure way of investing. Most people think of earning maximum returns by keeping their money in FD for a long time. However, you need to be careful with many factors before investing in FD. Today we are going to tell you about five factors, by using them you can get good returns by investing in FD. 


Time Limit Of FD 


The time limit for FD is directly linked to the interest rate, it receives. The longer you hold this FD, the better rate of interest you will get.


For example, the return of FD for 10 years is much higher than the FD made for a year. You can make FD for 1 to 10 years. Here, these FD can be done for short term (1 to 3 years), medium-term (3 to 5 years), and long term (5 to 10 years). 


Bank Rating 


Agencies give credit ratings like CRISIL and CARE to banks and other financial institutions only after testing on a variety of parameters. Whichever financial institution has the CRISIL FAA+ or CARE AA ratings, that is considered best for investment. So you can reduce your investment risk by knowing the financial institution's credit rating before opening an FD account.


Interest Rate


At present, the best interest rate on FD is around 6.70 percent. And also senior citizens can get an additional benefit of 0.25 percent. These interest rates have two types, cumulative and non-cumulative.


In cumulative mode, your investment remains locked until maturity. On term end, you get the interest accumulated with it. 


In the non-cumulative mode, you can earn a fixed interest rate every month, quarter, half-yearly, or annually. So you can choose the right interest rate mode for yourself for getting better returns. 


Loan Facility 


Generally, when we have a sudden need, a loan option comes up first. However, when you invest in FD, you automatically get the option to take a loan instead. You can take a loan as 75 percent of your invested amount. For this, you need to pay 2 percent more interest than the best interest rate you get on FD.


You can take this loan as long as your FD time limit is left. If your FD is for 10 years and you apply for a loan in the second year then you can take this loan for a period of eight years. 


Choosing Right Financial Institution 


It IS not necessary that every financial institution is right for this. Before opening the FD account in any financial institution, firstly know about its features and value-added services. If you want a better return from your investment, you can decide to open an FD account by keeping all these factors in mind.