What is the best-fixed deposit strategy you should follow?

Fixed deposits are one of the most popular ways of investment methods in the country. It has been called to be one of the most feasible options for investment throughout the previous times. However, some of the recent events in the banking sector have inculcated fear in many people regarding Fixed deposits and made them insecure. Though, the confusion regarding the reliability of fixed deposit must be left as it is, because it is undoubtedly the safest and safest way to invest your money. However, to ensure that the safety of your funds is maintained, there are certain fixed deposit strategies that one can follow. Some of these are listed below:

Distribute funds across family members evenly: In order to make your fixed deposits entirely risk-free, the best way is to evenly distribute it under the names of different family members, instead of getting them allotted under the same individual. This is due to the reason that the Government of India has increased the deposit insurance limit to Rs 5 lakhs per fixed deposit across each branch. Thus, it is important that no one Fd is invested for more than Rs 5 lakhs, as only up to Rs 5 lakhs are insured by the Government. If the amount is evenly deposited across each it can be secure in bulk, if invested together, a part of it will be invested.

Prefer multiple small FDs over a large one: Going for multiple small Fds instead of a single large one can help you earn larger returns on your invested amount. This is because the interest rates on fixed deposits vary across all the banks and NBFCs that provide fixed deposits. If you invest your fd across multiple banks, you can benefit from high-interest rates of different banks, at different points of time. However, if you deposit it in a single bank, the interest rates could be either lower or higher, but not diverse. This helps one avail Fd at the best rates. Apart, keeping your funds’ diverse will also help you to earn benefits on FD like premature withdrawal, without hampering your returns and investments. 

Be open to all types of lenders: FD is provided by private sector banks, public sector banks, commercial banks, cooperative banks, and NBFCs. Thus, a depositor should ensure that he diversifies his funds to different Fd providers, as it can help them make the best out of all benefits that each of them provides. For instance. The interest rates in the private sector banks or the Small finance banks could be higher than in a public sector bank. However, a public sector bank could provide you with more safety and can assure a lower risk on the investment. Thus distributing funds to avail funds could be a good deal to make. 

On a concluding note, it must be noted that fixed deposits are a highly secure means of investment. However, the recent turmoil that some banks suffered have put this notion into an understated uncertainty. Thereby, no matter what the norm suggests, yet to keep one’s fund completely free from any risk, it is the duty and responsibility of the investor to act wisely. To keep your funds safe in an FD, you can follow the above mentioned and can avail enjoy all benefits of Fixed deposits without any worry. 


Fixed deposits are often considered the most trustworthy and reliable ways to invest one’s money. The trust factor on fixed deposits and on banks has been inculcated in the Indian mentalities for a long time. However, some of the recent incidents have shaken the trust of investors on a large scale. And it has come to the surface that no investment is completely devoid of risk in the present era. In that case, how do you ensure that you invest your money with utter safety?

The answer to this lies in identifying that though no investment is entirely risk-free, yet there are certain things that one can do, that can make their fixed deposit investment, if not completely safe, but still safer than usual. This involves depositing funds in fixed deposits with proper strategies. Some of the strategies that one can follow are listed below:

  • The first thing to consider is that the Government of India provides insurance coverage to each fixed deposit across all banks and branches, to deposit up to Rs 5 lakhs. Thereby, any amount invested beyond that is not safe, in case a bank goes bankrupt. However, in that case, prefer going for multiple Fds up to this amount, registered under the names of different family members.
  • Secondly, there is no single Fixed deposit provider. Indeed, a fixed deposit is provided by private sector banks, public sector banks, commercial banks, and even by NBFCS. All of these Fd providers have their pros associated with them. Thereby the best way to utilize the investment is to make multiple deposits across different types of a lender to avail the best Fd benefits.
  • In addition to these, prefer having deposited your money in multiple small deposits, instead of a single bulk deposit. Different banks could provide you with different Fd rates. Thereby, to avail the best rates, have multiple deposits as it can help you grab a high-interest rate at all points of time. This is because the FD rates are not the same and linear at any point, one bank may provide both the highest and the lowest rates at any point of time. Thereby, it’s better to distribute the fund accordingly, as the return investment won’t be dependent on a single bank.

Thereby, on a concluding note, it must be understood that it’s all about being wise and strategizing the investment plan in order to meet your financial goal safely.