Do you have more than one fixed deposit accounts? Well, having multiple bank deposits has its share of advantages and pitfalls. But, like anything else in this world, even this could be managed with some easy tips.
In this write-up, you will go through some handy tips that will help you manage your multiple fixed deposits. Let’s begin!
Have multiple FD accounts? Let’s help you manage easily!
1.Managing the interest income
It should be your prime duty to always opt for interest’s reinvestment for the fixed deposit accounts that are paying you with the highest interest rates. Why? It will help you earn fabulous interest year by year. For other FDs not giving you higher ROI, you can go for the interest payout and use it for other purposes or even to put money in other investment vehicles. The option of the reinvestment works best for the FDs with longer tenor based deposits. You should also avail FDs with shorter compounding periods.
2. Breaking your Deposits
You could also utilize the benefit of having a sweep-in-account where the predetermined figure could be withdrawn from your FD being low. It will help you minimize the loss of interest. Select a bank where the multiples are lower.
3. Laddering your Deposits
Did you know that having multiple fixed deposits with varying tenors can help you earn fabulous returns, especially in a falling interest-rate scenario? Yes, you can always break an FD not giving you a bigger chunk of the ROI and rework the amount in an FD offering a good ROI.
4. Use Technology to your best Interest
If you have FDs with a single bank or a non-banking finance company (NBFC), you should make the most of the service provider’s internet banking service. It can be done to subscribe, view and redeem fixed deposits online. What’s more, there are various apps available these days that will help you view and track your multiple FD accounts simultaneously. Using these effective tools, you are free to see a synopsis of the FDs in your name as well as your relatives. The data is real time, and the service is also free of cost. What’s more, since it’s a view only tool, you need not be concerned about any security issues to breach.
5. Use overdraft facility
If you face some emergency situation and need some funds urgently, you can always consider utilizing an OD or the overdraft feature. Yes, multiple fixed deposits can help like this. You should avail an overdraft facility against only FDs that offer the lowest interest, and it means that you can get an amount at a rate of interest of around 8-10% whereas conventional personal loans are charged at about 12%.
The Bottom Line
Despite the advantages, you should remember that too many fixed deposit accounts could be a cause of hindrance as well. Financial experts suggest not having more than 7-8 fixed deposit account at your disposal. Also, you should also be acting smartly to prematurely close the FD not offering you good returns if not tenured for more than a year.
Above all, being positive and optimistic are the keywords to help you manage your multiple fixed deposit accounts with ease. All the best for your multiple FD management!