Deep, deep dive
- Before you invest, check that your FD is insured by PIDM
- Check terms and conditions before agreeing to promotional rates
- Split your FD savings into a few smaller accounts
- Make sure you know the penalty of withdrawing funds before the end of the term (prematurely)
- Understand requirements to partially withdraw funds from your FD
How to choose your FD?
How long do I have to leave my money in an FD?
When it comes to fixed deposits there’s a whole bunch of time frames to choose from, typically ranging from one month to 60 months (5 years). If you feel that you might need some of the money within the 3 years, you can always opt for a shorter tenure like 6 months or even one month. That way, you’ll be able to access your money after a few months while your cash works to generate interest for you in the meantime.
Is the interest the same if I choose a 1 month or 3-year fixed deposit?
The longer the tenure of the fixed deposit, the higher the interest rate. Banks will usually display this rate structure on their website.
Remember: Interest rates are usually listed as “% p.a.” meaning ‘per annum’ or yearly. If the tenure you’ve chosen is less than a year, you’ll have to divide it by 12 and multiply it by the number of months you’ll be investing your money.