Even though FDs are a safe investment choice, that doesn’t mean to forget to revisit them. Regular monitoring can help double the income you generate from FDs.

Are you a serious medium to long-term investor looking to generate a reasonable income on your fixed deposit investments? You must keep an eye on your fixed deposits for better returns. This does not mean undertaking an accurate evaluation of your fixed deposit performance, since you will earn returns at a guaranteed or fixed rate offered by the lender till the end of the tenure. Rather, you need to keep track of your fixed deposits at the time of maturity.

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Here’s Why:

Forgetting Can Cost You Dearly:

Sunil Pawar, a school teacher from Mumbai, had invested Rs.30,000 in a fixed deposit with a bank in 2010. His deposit matured in 2015, but he forgot all about it. He finally woke up and remembered about his investment only in 2017. He approached the bank, but found that they authorities were unable to locate the records relating to his fixed deposit. He had no choice but to approach the banking ombudsman to get his investment back. Though he got his money back, he lost out on the interest he would have otherwise accumulated. When you fail to keep track of your FDs, most likely the bank will dispose your old records. You also incur losses on returns by keeping your money stagnant for long.

Auto Renewal FD:

When you invest in a fixed deposit, you can choose to either take the maturity amount as a lump sum at the end of the tenure or ask the bank or lender to automatically renew it. This does away with the hassle of you trying to remember the date your FD matures, and also ensures that you don’t lose out on the interest on maturity of your fixed deposit.

The Limits of Auto Renewal:

Auto renewal may not always be a good idea, especially if you are looking for higher interest rates. If you fail to provide the relevant instructions, your fixed deposit will be auto-renewed at the prevailing interest rate for the same term. Opting for auto renewal could make you miss out on opportunities to earn a better rate from other banks or NBFCs.

Opt for Direct Credit:

Consider going for direct credit of your fixed deposit maturity amount to your savings bank account. As the final proceeds are directly deposited as lump sum in your savings account, this eliminates the need for filling in more papers to claim your maturity amount, which you can utilize to open another FD with a tenure you are comfortable with.

How to Monitor and Track Your Fixed Deposits For Better Returns?

To monitor your fixed deposits, make sure to check the calendar you have marked in advance (a physical calendar or a digital one on your phone or laptop) with the maturity dates of your investments. Another good idea is to set a reminder in your smartphone on the due date. This would allow you enough time to approach other banks or NBFCs for better alternatives and even help you decide to switch to another term when your deposit matures.

Repo Rate Changes:

Fixed deposits are not susceptible to volatility however, banks, and other lenders too, charge fixed deposit interest rates according to the RBI repo rate. With frequent changes in the repo rate and other policy changes, the interest you get varies every quarter of the financial year. And since these changes are frequency of changes in fixed deposit interest rates is on the rise, it is crucial that you monitor your fixed deposits periodically.

Auto Renewal Procedure You Should Be Aware Of:

If you have opted for auto renewal on your fixed deposit for better returns, you can change the mandate before the maturity date. But what if you want to break your auto-renewed fixed deposit after the maturity date? You will not only have to forego the extra interest accrued, but also pay a premature withdrawal penalty.

Make your FDs earn more by regularly monitoring the interest rate and the FD maturity date. Look for higher interest rates to make your money grow in a safe environment. Bajaj Finance, for example, provides fixed deposit schemes with an easy application and documentation process at a high rate of interest.

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