How 1-day maturity difference impact your interest income check simple calculation, Know here

Bank FDs: In the country, bank fixed deposits (Bank FDs) are considered a traditional and better option for safe and fixed returns. The best thing about this is that the investor knows at the time of deposit how much interest he will get according to the tenure. While getting a bank FD, it is important to pay special attention to the tenure because sometimes taking 1 day less or more maturity affects the interest. For example, if the FD tenure in a bank is less than 3 years and 3 years or more, then the interest rate will vary if it is less or more than 1 day.

FD: Focus is on round figures

Usually, people open FDs in round figures. Such as 6 months, 1 year, 2 years, 5 years. Whereas in some banks, for this round-figure period, if the tenure is less or more than 1 day, the interest rate on FD becomes different. Therefore, before opening an FD, do find out the FD period and the interest on it.

FD: Know the value of 1 day

Let us understand this with an example. In SBI, regular customers are getting 6.50 percent annual interest on FDs ranging from 211 days to less than 1 year. Similarly, if the tenure of FD is kept from 1 year to less than 2 years, then the interest rate will be 6.80 percent. That is, there is a difference of 0.30% in the interest rate due to a difference of just 1 day.

FD: Know the value of 1 day

Let's see another example, if a regular customer makes a short-term FD i.e. 7-45 days in SBI, then the interest rate is 3.50%. But as the tenure becomes 46 days, the interest rate directly increases by 2% i.e. 5.50%. Therefore, one should always keep in mind the difference of 1 day while making an FD.

How safe is the deposit in Bank FD

Usually, people think that the money in Bank FD is safe, but if the bank defaults, then only up to Rs 5 lakh of the investors' deposit remains safe. The same rule applies to finance companies as well. Deposit Insurance and Credit Guarantee Corporation (DICGC) gives an insurance guarantee of only up to Rs 5,00,000 on bank deposits.

(Note: The FD interest rates used in the calculation are taken from the official website of SBI.)