Fixed Deposit: How to choose a bank for opening an FD account?

Popular investment option offering guaranteed returns and safety for your money. Choosing right bank for opening FD account involves thorough evaluation of various factors.

Compare the interest rates offered by different banks. Public sector banks, private banks, and small finance banks may offer varying rates. 

FD rates have been on the rise. Recently, and in the past few months, some banks like SBI, Axis, Bank of Baroda and Union Bank have announced hikes in FD interest rates. .

Opt for banks with high credit ratings and a solid reputation. Look for banks offering flexible tenure options ranging from a few days to several years. 

Check the terms for premature withdrawal, including any penalties. This is crucial if you need access to your funds before maturity. 

FD laddering is strategy where you divide large sum into smaller FDs with varying maturities. Instead of investing entire amount in a single FD, you spread it across multiple FDs.

Short-term FDs are those with tenures ranging from 7 days to 1 year. They are ideal for investors looking to park their funds for a brief period while earning better returns.

Special FDs refer to fixed deposit schemes that banks introduce for specific durations or occasions. These might offer higher interest rates for particular tenure periods.