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6 Little-Known Factors That Could Affect Your Fixed Deposit Investment


Whether you are a seasoned investor or an investor who is just starting their investment journey, fixed deposits are an attractive and safe investment option. Low risk coupled with competitive returns makes fixed deposits a viable option for anyone looking to grow their wealth over time. FDs offer a higher interest rate than a savings account and provide security from the volatility of the stock market. FDs offer flexibility in terms of the maturity period and interest rate. They also offer additional benefits which include an assured return and the ability to get your principal investment back upon maturity. There is no limit to the amount of money you can invest in a fixed deposit. They can be a great way to protect your wealth and generate additional income.

In this blog post, we will take a look at 6 factors that could influence your fixed deposit investment. From varying interest rates to the financial health of the issuer, certain factors could have a potential impact on your FD investment.

Equipped with this information, you will be able to make more informed decisions about how best to invest your money.

1. Financial Standing of the Issuer

The financial health of the company or bank issuing your investment is of utmost importance for protecting your money. When considering investments with the promise of substantial returns, it is important to exercise caution and assess the reliability of the entity offering them. A good way to do this is to look at their balance sheets and other financial statements to gain an understanding of their current financial position.

It is important to do your due diligence with particular attention to their liquidity and ability to pay out returns. Being too risky in pursuit of greater rewards may not be a prudent strategy. FD ratings in India are assigned by credit agencies such as CRISIL, ICRA, India Ratings & Research, CARE and such other bodies after carrying out a comprehensive assessment. It is advisable to review the promoter history and credit grade, as indicated by rating agencies. This will help you evaluate the dependability and financial viability of the issuer. Investing in NBFCs like Shriram Finance which has been accredited with [ICRA]AA+ (Stable)” by ICRA and "IND AA+/Stable" by India Ratings and Research gives the safety and surety of your invested money.

2. Period of Investment

The period of investment for an FD is closely linked to its interest rate. Consequently, you can always obtain the most competitive rates in the long run. Generally, 10-year FD accounts tend to offer a higher rate of return that is at least 1% to 1.5% higher than an investment with a shorter period.

The typical time frame for FD investments is between 1 and 10 years. A short-term investment has a tenure of 1 to 3 years, while medium-term investments range from 3 to 5 years and long-term FDs are those with a tenure of more than 5 years. At Shriram Finance, FD tenure period ranges between 12 months to 60 months.

3. Interest Rate

Identifying a fixed deposit that provides higher interest rate for an FD is essential to maximize returns. Senior citizens have the opportunity to take advantage of a 25 to 50 basis points (bps) rate increase above the normal rate (for non-seniors). A cumulative FD yields both principal and accrued interest at the end of investment term. A non-cumulative FD provides interest distributions periodically, such as monthly, quarterly, half-yearly or annually. In a nutshell, it is important to note that the interest rates may differ for each payout option. Make use of the Shriram Fixed Deposit Interest Calculator to calculate the interest on your investment amount.

4. Early Withdrawals

FDs can typically be withdrawn before maturity. This is subject to a reduced interest rate (typically between 0.5% to 1% less than the agreed rate) and any other conditions as specified by the bank or company. In times of crisis or emergency, this is especially valuable when quick access to funds is required.

Note that for certain types of FDs, early withdrawals may not be allowed. In the event of a joint deposit, all account holders must provide a statement of consent to the bank or corporate. This is required so that the surviving account holders may be eligible to receive the maturity proceeds in the event of the death of one of the holders.

For example, in Tax Saver FDs, which are subject to a 5-year lock-in period, premature withdrawals are not permitted. Therefore, if you are assessing liquidity, it is recommended to evaluate the possibility of early withdrawals and the associated terms and conditions.

5. Interest Investment Options

When investing in fixed-term deposits, there are several viable options available, such as reinvestment of interest at a quarterly rate, receiving interest payments quarterly, or collecting monthly interest payments. Take your financial needs into consideration when selecting these options.

For example, a senior citizen who desires a consistent source of income may opt for either monthly or quarterly interest payments directly deposited into their bank account. For those with a short-term financial goal of 2 years, reinvestment of interest rather than regular payouts may prove to be a more advantageous option.

6. Borrowing Against Fixed Deposits

Many banking institutions provide the ability to borrow against an FD. Being able to access funds quickly in times of need without having to liquidate investments is particularly beneficial.

You can access between 80%-95% of the funds deposited in an FD. It is recommended to utilise a secured loan process wherein an FD may be provided as collateral to obtain a loan. In this instance, it is not necessary to break your investment or opt for early closure.

Also, loans against FDs are typically associated with lower interest rates than those associated with personal and other types of loans. In addition to this, you will be eligible for a loan against FD with minimal paperwork, while continuing to earn interest on your investment. It should be noted that interest is levied on the actual amount utilised and for the duration of use.


Fixed deposits have been a popular mode of investment in India for several decades. If you are an investor, Shriram Fixed Deposit is a secure investment opportunity that offers guaranteed returns. FD investments have their own unique set of risks and rewards. Unlike other investments that are subject to market volatility, the returns from your investment will remain unaffected.

Shriram Fixed Deposit offers interest rates as high as 9.20%* p.a., including of 0.50%* p.a. interest rates for senior citizens and 0.10%* p.a., for women investors. If you are looking for a safe and profitable investment opportunity, book Shriram Fixed Deposit now!

Key Highlights

  • Fixed deposits offer assured returns without the risk of loss of the principal amount.
  • All returns generated from fixed deposit investments are subject to taxation as per the Income Tax Act.
  • Fixed deposit returns remain independent of market volatility.
  • Fixed deposits can be used as collateral for a loan.
  • Shriram Fixed Deposits offer high interest rates of up to 9.20%* p.a., including interest benefits for senior citizens and women investors.


  1. What are the advantages of investing in an FD? One of the primary advantages of investing in an FD is the guaranteed rate of return. Additionally, the term of the FD is flexible and dependent on the investor. Apart from this, liquidating the investment is relatively straightforward.
  2. What is the minimum amount required to open an FD account? The minimum amount to open an FD account is ₹5,000 with Shriram Finance. It depends on the criteria set out by each bank or NBFC.
  3. Are there any special rates available for women investors? Yes, some banks and NBFCs provide women depositors with additional benefits on FDs. Shriram Fixed Deposits offer women investors an additional 0.10%* p.a. interest rate.
  4. What will be the result of the early closure of my FD? If you want to close your FD before maturity date, a nominal charge has to be paid when you withdraw the amount.
Shriram completes 50 years of service!

To mark this momentous occasion, we have launched Shriram Jubilee Deposit - a 50-month investment scheme.
Invest now and earn up to 9.20%* p.a. (including 0.50%* p.a. for Senior Citizens and 0.10%* p.a. for Women)

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