Things to Check before Finalizing Your Fixed Deposit

Presently, investment experts have been found to advise their clients to lock their finances in company deposits before an interest cut comes into effect. This is because it is predicted that soon the RBI will start slashing interest rates, which would lead to a cut in bank deposit rates. There also is a possibility that this would result in a drop in interest rates in the not-so-distant future.


Currently, SBI, the government operated banking firm, offers an interest rate of 8.75% on fixed deposits with a 1–3 year maturity. On the other hand, other private financial institutions offer a 9.25% or even a 10–11% interest. However, don’t get swayed just by the interest rates; there are several other factors that you must consider before investing into a company. Here are some of them.

Credit rating

Fixed deposits are gaining popularity by the ranks offered by the various credit rating agencies such as Crisil, India Ratings, and many others. Checking the rating of a financial institution is the first step towards selecting a company’s fixed deposit scheme. These ratings are what determine the highest credit quality and the lowest credit risk for a deposit scheme.

Company quality

Always remember to check the group background and the value of the business you plan on investing in. very importantly, find out the firm’s repayment record, its financials—losses, debts etc. before taking any kind of step forward. A firm with a low credit rating is more likely to offer you higher fixed deposit interest rates compared to others like SBI and other highly rated institutions.


The lock-in period of a company’s deposit is what determines how liquid its products are. This is easiest way you can be sure of getting back your money, along with interest. Majority of deposit schemes have an initial lock-in scheme of about 6 months. In case of a withdrawal after three months but before six months, the deposit holder is paid, not the entire interest rate promised, but about 4%.

Interest payments

Company fixed deposit schemes are the one that can pay interest monthly, quarterly, annually, half-yearly and cumulatively. The term varies from company to company. People who are in need of regular additional income, can opt for a specific plan that offers them periodic interest payments. However, benefits from fixed deposits something that is considerably larger as the interest paid is ploughed back into the deposit account and the deposit holder benefits from compounding.


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