Tips for investing in Fixed deposit
Fixed deposit is the first choice of people who are looking for a safer investment instrument than mutual fund and equity. In today's time, the rate of interest on FD is on the higher side, but there are also chances of the interest cycle to turn, thus, it is advisable to use this opportunity and lock your surplus funds with higher interest rates. In addition, there are some key points to consider before investing in FD.
a) Split your money with different banks so that in case if you need some funds in the future you can get that by breaking the FD for the amount you require instead of your total investment.
b) It is only sensible to compare the rate provided by banks and financial institutions before investing in FD, in order to choose those who are providing the highest returns.
c) Opt for different tenures for your fixed deposit so that you maintain a certain level of liquidity and also the opportunity to reinvest your amount and balance the effect of interest fluctuation.
d) You can also choose to re-invest the interest earned in FD.
e) Interest earned on FD is taxable as per your income tax slab. It is to be recorded when calculating total income for tax calculation.
f) Also, keep in mind that if you break your FD before maturity there will be some prematurity charges you need to pay and interest will be reduced as per tenure served.
A credit report contains four types of accounts which reflect the creditworthiness and history of the person. These four accounts are:
a) Open accounts are the existing loan accounts.
b) Closed accounts are those on whom you have made the complete payments.
c) Settled accounts are those on whom you have paid the amount which was less than outstanding amount after negotiating with the bank to settle the account and consider this the full and final payment.
d) Written-off accounts are those which the banks have written-off after failing to get any payments from you. Although the amount is still owed by you.
Since written-off account stays for longer than 7-10 years and negatively affect your CIBIL score, thus it is better to take steps in order to improve the situation. Some tips in this regard are:
1. Check for any errors like false identity, records not updated etc. If discovered then get it rectified.
2. In case of your account check the amount needed to pay.
3. Attempt to settle the account through negotiation, in case of written-off accounts banks are ready to negotiate significantly.
4. Settled account have a less negative impact than written-off account.
5. In order to improve the score further make the habit of timely payments of current EMIs.
6. Also, maintain an acceptable balance between secured and unsecured loan. How you manage unsecured loan reflects how you manage your debt.
How to Remove a Written-off Account From Your Credit Report
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