DelhiDesk Fixed deposits (FDs) are a popular investment option for risk-averse individuals and senior citizens seeking capital preservation and guaranteed returns. However, many retail investors are not aware of strategies such as the barbell and laddering approaches that can yield higher returns. The barbell strategy involves dividing the FD portfolio into short and long-term deposits to take advantage of potential interest rate fluctuations, while the laddering strategy involves spreading out investments across different maturities to maximize returns and reduce risk. Strategies such as compounding period selection and diversifying FD investments across multiple banks can further enhance returns and mitigate risks. However, investors should be aware of the risks associated with these strategies and regularly assess their risk tolerance and market conditions.
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👉 The appeal of FDs extends to various segments of the population, including risk-averse individuals and senior citizens.
👉 Barbell and laddering strategies can fetch retail investors better returns on their FDs.
👉 The barbell strategy involves dividing the FD portfolio into short-term and long-term fixed deposits, while avoiding intermediate-term FDs.
👉 The laddering strategy involves spreading out your money across different maturities to maximize returns and reduce risk.
👉 Investors can enhance their returns by carefully selecting the compounding period for their FDs.
👉 TDS deduction on interest income can impact the final maturity value of the FD, and investors can prevent unnecessary compounding losses by diversifying their investments across multiple banks.
👉 Both FD laddering and barbell strategies carry certain risks, and investors should regularly assess their risk tolerance, monitor interest rate trends, and diversify their investment portfolio to mitigate these risks.
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