FD Laddering Strategy Banks are offering attractive interest on FDs after increasing the repo rate. In this report, we are going to tell about a strategy with the help of which you can increase FD returns.
Bank FD is a popular investment option in India. If you are an investor who does not want to take any risk then FD can be a good investment option. At present, after increasing the repo rate by the RBI, the interest on FD has increased to an average of seven per cent, which was around five per cent a year ago.
The repo rate has not been increased by the central bank in the monetary policy released in early April . After this, it is feared that the increase in FD interest rates may now stop or the pace may slow down.
Today, in this report, we are going to tell about such a strategy related to FD , by which you can increase your returns. This is called laddering strategy. Let’s know about it…
What is FD Laddering Strategy?
FD laddering is a strategy. In this, you divide the investment made in FD into small parts and get FD done at different periods and interest rates. The advantage of this is that along with liquidity, you get the benefit of investing at a higher rate of interest in the future.
Advantages of FD Laddering Strategy
Diversification of portfolio- The major advantage of FD laddering is that it allows you to diversify your portfolio easily and take full advantage of interest rate fluctuations.
Liquidity- The FD laddering strategy ensures liquidity in small FDs regardless of the investor investing in the FD.
Higher returns- By investing in this strategy, you get the benefit of rising interest rates.
Flexibility- The biggest problem with investing in bank FDs is that you have to break the entire FD when needed and the bank charges a penalty on it. On the other hand, due to small FDs, you can break the fixed deposit as per the requirement and the penalty is also less on you.
