The downsides of floating-rate fixed deposits (FDs). Better invest in this for now
best time to lock your money into high-return term deposits. “We expect that the key policy rates will come down post-Q2 2024. Gradually, the market will start factoring this, which will have a downward impact on the FD returns of various banks, small finance banks, and NBFCs.
Given the context, this is the best time to lock your money into high-return FDs. Small finance banks are a good choice as they offer about 1-2% per annum extra interest compared to most established banks," said Anshul Gupta, Co-Founder and Chief Investment Officer, of Wint Wealth. “Customers can lock in their money in FDs of shorter tenures offering higher returns," said Adhil Shetty, CEO, of BankBazaar.com.
Some banks are trying to sell floating-rate FDs. Investors would do well not to invest in these FDs, as the interest rates are expected to decrease soon, said Anshul Gupta. -The investor will enjoy higher returns if the base rate of floating rate FDs has an increasing trend.
-The interest pay-out for a floating rate FD takes place on the last day of every quarter. -Nomination facility available -Senior citizens enjoy the special benefit of a higher interest rate of 50 basis points more than general customers. -You can avail of loans against your floating rate fixed deposit.
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