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A Fixed deposit is a standard safe investment employed by most individuals. Without thorough research though, different FDs available may appear to be the same. There are, however, several customizable variations available as well. Keeping this in mind, it is best to consider all the possible permutations and combinations before making your final decision. These factors include:

Organization: Most people fail to look for variation here. The lack of research can potentially cost you the best interest rates available. While the traditional approach is to invest in the bank that you use for personal banking, it may not offer you the best rates. While the difference between rates might not be drastic, owing to the competitive nature of the market, it is always better to get more rather than less.

Payout: This is a very important variation between fixed deposits in India . Depending on your strategy, users can ask for monthly, quarterly or annual payouts on the deposit. You can also ask to re-invest the interest earned, in order to gain even more returns. This re-investment feature is similar to the growth feature of Mutual funds, but is not available in every bank or financial institution. It is important, though, to use these options based on your financial requirements, expenses and monthly cash flow.

Time: There are several different time frames available. The minimum period for a fixed deposit investment is 7 days while the maximum period can vary from 5 to 10 years. The best interest rates come from long term investments, though. Most people hesitate to invest for such a long duration and instead opt for the period of a year instead. The relatively shorter period, if you have certain financial requirements in mind, offers the right balance of liquidity and interest rates for most people. As an investor, if you don’t foresee the need or premature withdrawals, you should opt for the longest possible duration as it will result in the highest return. For the most part, the interests for these deposits are almost the same as what is earned on a savings account.

Age group: Senior citizens get higher interest rates in comparison to the lower age group, which could be a big advantage for some. A common strategy to avail this advantage is to invest in the name of your family member who is a senior citizen. This strategy, though, has some limitations. While the returns are higher, it is tougher to get premature withdrawals or overdraft facility if you invest in someone else’s name.

Overall, a fixed deposit has high liquidity and decent rewards. Professional investors, though, don’t favour this as it comes with lower returns than the stock market. Keeping in mind that you will receive around 8 to 10 percent interest, this is understandable. The right strategy will be to use this tool as a potential safety net to help sustain losses incurred in the stock market. You can also use the high liquidity of this investment during any kind of emergency.

One point that every user agrees on is that opting for the perfect housing loan interest rates is very important. The interest rate tends to be most borrowers’ first criterion for loan selection. Lack of information, though, leaves most borrowers consenting to a home loan that is not in their best interest. So, why is it important to pay equal attention to other aspects of home loan?

First of all, the type of home loan affects the amount of interest and EMIs that you pay in the long run. For the most part, interest rates vary substantially if you opt for floating interest rates. The low and doable interest rates will basically hike up and make it challenging to pay your EMIs. Fixed interest rates, on the other hand, can vary after a stipulated time frame. Keeping all this in mind, it is important to pay attention and select the type of rate that you can comfortably pay.

Secondly, you must consider the term of your loan. A housing loan is the longest financial contract taken up by most people. Most EMI calculators will show you that a longer duration may imply lower EMIs. This, however, also means that you pay more amount as interest. So, how much are you agreeable to pay as interest? How much EMI can you afford to pay? These factors make it important to carefully consider a home loan term before opting for it.

Thirdly, the terms and conditions need to be studied carefully. This is because the loan taken can impact your financial state over a period of 20 to 30 years. Would you want to pay additional EMIs and finish off the loan early? If you do, it is advisable to check the pre-payment clause in your home loan agreement. You may also want to top up your home loan for home renovation, which certain banks don’t allow. In terms of legal fine print, there may also be several liberties awarded to the bank or financial organization that you are unaware of. Therefore, it is best to take your time and read that huge document very carefully, preferably with a financial expert who could provide much clearer insights.

An important question that most people ask is if the home loan interest rates affect the amount you pay? Definitely, it is the first factor that affects it. But other factors like the type of interest rate, duration along with other terms and conditions also have an effect on the same. Therefore, it is necessary to make comprehensive and well-informed decisions. Sometimes, the loan which doesn’t have the lowest rate comes instead with the right combination of other factors that add up to a well rounded product that is customized to your needs.