Investing in a fixed deposit (FD) provides a guaranteed return, making it a popular choice for many. However, the interest you earn from an FD largely depends on several factors:
- Interest Rate: The prevailing FD interest rates can vary based on the bank or financial institution, and these rates often change due to economic conditions.
- Tenure: Longer tenure FDs generally offer higher interest rates.
- Interest Payout Frequency: Depending on whether you choose monthly, quarterly, or annual interest payout, or if you opt for cumulative interest, the effective yield can vary.
Let’s say, for illustrative purposes, that a bank offers a 5% annual interest rate for the tenure you’re considering. On a 2 crore deposit:
Annually = 2,00,00,000 x 5% = ₹10,00,000
So, you’d receive ₹10,00,000 annually. But remember, if the interest is compounded quarterly or monthly, you’d receive a slightly higher amount due to the compounding effect.
While FDs are secure, the returns, especially in a declining interest rate environment, might not always beat inflation. For more robust growth and to preserve the purchasing power of your money, you might consider diversifying into other avenues. Equities, for instance, with a judicious mix of stocks vetted with an approach like Roots & Wings of Jama Wealth, could potentially offer higher returns. But always weigh the risks before deciding.
To sum up, your exact FD interest will depend on the terms offered by the bank. It’s beneficial to shop around for the best rates and terms and to consider alternative investment avenues for part of your corpus. And if you’re looking for tailored advice, Jama Wealth’s expert investment advisory can provide valuable insights.
