Close Menu
    Facebook X (Twitter) Instagram
    • Contact Us
    • About Us
    • Write For Us
    • Guest Post
    • Privacy Policy
    • Terms of Service
    Metapress
    • News
    • Technology
    • Business
    • Entertainment
    • Science / Health
    • Travel
    Metapress

    How to Split Your FD Investments for Maximum Interest Rate Benefits

    Lakisha DavisBy Lakisha DavisDecember 25, 2024
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    How to Split Your FD Investments for Maximum Interest Rate Benefits
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Smart investors always look for ways to improve their returns and still have a well-balanced risk profile. A suitable method you can utilise is to use your Fixed Deposit (FD) investments in splitting. Splitting the money with different tenure FDs would give you higher interest and better liquidity.  

    How to Invest in FD Laddering: Split your FD investments and obtain maximum returns.  

    What is FD laddering?  

    This means FD laddering, where an investor divides their investment amounts into a few small FDs with differential maturity periods. Instead of putting a lump sum into a long-term fixed deposit, you invest the money in smaller deposits that mature every 3, 6 or 12 months.


    Key Questions to Consider:  

    1. How Much Should I Invest In FDs  

    2. Pick the number of FDs you would like to open and the tenures in which you need money.  

    3. Split your total investment amount among such FDs equally.  

    4. Invest it back in your new FD with a longer tenure so that when the previous deposit matures, the principal and interest will be reinvested into the new FD with a longer tenure.  

    5. Repeat this until you consistently have short-term and long-term FDs.  

    FD ladder example 

    Let’s say you want to invest ₹5 lakh. Instead of placing the entire ₹5 lakh in a single 5-year FD, split it into five separate FDs of ₹1 lakh each, with tenures of 1 year, 2 years, 3 years, and so on, up to 5 years.

    When an FD matures, you will then put the proceeds into another 5-year FD, which matures, and a portion of your investment will pay off every year whilst the rest keeps accruing higher returns.

    Advantages and Disadvantages of Splitting FD Investments 

    Pros: 

    • Higher returns: FD ranges from different tenures, and you can invest through FD laddering. This will enable you to pool your overall returns better than when investing in a single FD.  
    • Balancing: This method balances the portfolio by dividing your funds amongst different FDs with various maturity dates. You can deposit the money with any number of banks or in different FDs. 
    • Liquidity Enhancement: FD investments will liquefy when you receive maturity amounts from every FD. You will not have much liquidity anywhere to the extent of locking in your FDs in support of a single long-term investment.  

    Cons: 

    • Time: This wants attention and maturity payback cells  
    • Dependence of maturity income rates: A falling interest rate environment might not offer this strategy the most favourable returns. If FD interest rates are stable, splitting your investments across multiple FDs could be less lucrative than a single long-term FD.   

    Conclusion

    Using laddering to split your FD investments is one smart way to Structure the returns with some level of liquidity. Dividing your corpus into several FDs with different tenures ensures the maximum possible FD interest rates, diversification, and periodic liquidity from your investments. But before you go on an FD laddering spree, you better evaluate your financial goals and the state of the market.   

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Lakisha Davis

      Lakisha Davis is a tech enthusiast with a passion for innovation and digital transformation. With her extensive knowledge in software development and a keen interest in emerging tech trends, Lakisha strives to make technology accessible and understandable to everyone.

      Follow Metapress on Google News
      ChatGPT vs Claude vs Gemini: I Used All Three to Save 10 Hours a Week – Here’s What Actually Worked
      July 1, 2025
      I Made $100K With ChatGPT and Claude – Just By Selling a Notion Template
      July 1, 2025
      Top 5 Ways I Made Money With ChatGPT in the U.S. — No Degree, No Team, No Ads
      July 1, 2025
      Between Taps and Spins: How Gamified Systems Have Quietly Entered Our Non-Gaming Lives
      July 1, 2025
      Business Set Up in Dubai: Launch with Confidence in the UAE
      July 1, 2025
      Flower Delivery Services: How Do You Select a Bouquet for Your Special Day?
      July 1, 2025
      8 Best OKR Software for Young Entrepreneurs
      July 1, 2025
      How Custom Powder Manufacturers Help Supplement Brands Stand Out in a Crowded Market
      July 1, 2025
      iGaming SEO Guide
      July 1, 2025
      Everything You Need to Know About Video Sharing Apps and Firefox DRM
      July 1, 2025
      Leveraging Technology: How Online Sportsbook Platforms Enhance the Sports Experience
      July 1, 2025
      Rethinking the Agency Model — How Occams Digital Is Flipping the Script
      July 1, 2025
      Metapress
      • Contact Us
      • About Us
      • Write For Us
      • Guest Post
      • Privacy Policy
      • Terms of Service
      © 2025 Metapress.

      Type above and press Enter to search. Press Esc to cancel.