Risk vs. Reward: Assessing the Safety of High-Interest Fixed Deposit Schemes

For all the conservative potential investors out there, fixed deposit schemes have long been a popular choice as they tend to seek a safe and stable avenue to grow their savings. 

However, in recent years, especially after the Covid-19 outbreak, high-interest fixed deposit schemes have gained popularity due to the lucrative fd interest rate. Around three months ago, I was planning to invest in the same; believe me, investing in this instrument scheme has never been so easy. Just a few taps on your smartphone, and you are more than good to go.

What is a fixed deposit?

Commonly known as FD, a fixed deposit is one of India’s most commonly availed investment options that offers higher interest rates than a savings account.

From 7 days to even 10 years, FDs often have a varied tenure, and it totally depends on the potential investor which one to choose as per the financial needs.

What are the advantages of investing in FD?

●     Fixed Deposit Interest Rate

Instead of keeping all your hard-earned money in a regular savings account, always opt for an FD, as it offers a much higher rate of interest. This is one of the topmost factors that lures more and more potential investors towards this investment instrument.

●     Assured returns

Once you invest your money in an FD, you are in for assured returns, no matter what. Here, you get assured returns as the interest rate does not undergo market fluctuations and, hence, does not impact the deposit amount at all.

●     Tax Benefits

A tax-saver FD that has a lock-in period of 5 years helps you save on your taxes. This falls under Section 80C of the Income Tax Act, 1961, and in this, one can easily claim up to Rs 1.5 lakhs against the FD.

●     Loan against an FD

If, by any chance, you have any kind of emergency, you need not break your FD prematurely. Instead, you can leverage your FD, apply for a loan, and then continue earning interest on the deposit amount. Most financial institutions only allow you to take up to 90% of your FD as collateral for the loan.

●     Flexibility

The decision of the tenure for a fixed deposit account depends solely on the holder of the account. The minimum tenure of this investment totally depends on the lender and, as mentioned above, can easily vary from 7 days to 10 years.

Evaluating the Safety of High-Interest Fixed Deposit Schemes

1.   Research

Before investing your hard-earned money, ensure that you conduct thorough research on the institution offering the investment scheme. You need to check their financial stability, reputation, and track record. Look for any negative news or legal issues associated with the issuer.

(Tip: Use a Fd calculator before you plan to invest.)

2.   Fine Print

Reading the fine print might consume your time, but is very valuable. So, carefully review the terms and conditions of the fixed deposit scheme. Pay close attention to the rate of interest, tenure, lock-in period, etc.

3.   Monitor your investment

Keep a proper track of your investment. This has to be done periodically to ensure the issuer continues to meet its obligations. So, always be ready to take action if you notice any red flags or signs.


Before investing your hard-earned money, always use certain tools in order to calculate fd interest. This will give you a clear idea of what you’ll be reaping out of your investment.

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