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
      One Prompt, One Product: ChatGPT Prompt Generator Brings Your Idea to Life in Just a Few Hours
      August 22, 2025
      ChatGPT Cleaned Data Sets – An Analyst Finally Stopped Pulling All-Nighters
      August 22, 2025
      Why “The Bhootnii” Stands Out in Horror Movies Available on ZEE5
      August 22, 2025
      Smarter Living: How Rwazi Helps Organize Your Life and Finances
      August 22, 2025
      Hidden Gems You Can Only Discover On Nile Cruises
      August 22, 2025
      A Beginner’s Guide to Watching Sports Online
      August 22, 2025
      Waking Up With a Sore Throat and Sinus Pressure in Singapore: Tips, Tricks, and What It All Means
      August 22, 2025
      Cloud-Based Transportation Management Benefits
      August 22, 2025
      How Does Digital Signage for Events Enhance Engagement?
      August 22, 2025
      Installing Magis TV on Smart TV (Samsung, LG, Sony): Step-by-Step Tutorial 2025
      August 22, 2025
      Finding the Best IPTV in Canada A Complete Guide for Viewers
      August 22, 2025
      What Are Web3 Games?
      August 22, 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.