A fixed deposit is probably the safest form of investment, mostly immune to the existing financial volatilities. However, despite the widest possible range of benefits, liquidity might be a glaring issue, in case you are considering an FD as your primary form of investment. This is why individuals end up withdrawing FDs prematurely and even accommodate the brunt of penalties.

Then again, if you are smart enough, you can plan out your FD investments according to the situation, precisely to make room for a penalty-less, premature withdrawal. It must also be noted that the best fixed deposit scheme in the era of financial challenges is the one that allows liquidation sans fines or additional charges.

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Opt for Laddering

Laddered investments are the best choices, especially when we are dwelling in an era of diverse financial uncertainties. Better termed as the multi-deposit plan, laddering is a good approach towards financial sustainability where you end up investing in multiple FDs with incremental maturity tenures.

Consider Sweep-Ins

A Sweep-In is probably the best fixed deposit scheme to rely on, if you prefer a certain form of liquidity, at all times. In case you opt for a sweep-in savings account, a certain portion of your savings automatically gets converted into an FD. This way, the financial institution only holds the threshold value as the liquidated amount at all times and fixes the rest for reaping the benefits of a fixed deposit.

Take a Loan

The best way to avoid penalties on premature withdrawals is to avoid withdrawing, altogether. In case you have a financial emergency lined up, you can always opt for a loan against FD. However, the trick is to invest in more credible options first, simply to make the most of the recurring or compounding FD rates. PNB Housing FD rates are one of the more competitive ones in the market and this HCF also allows you to get a low-interest loan against the fixed deposit, allowing you to address the financial irregularities at the earliest.

Invest in Short Tenor and Non-Cumulative Funds

In case you are still looking to invest and an FD is a priority, consider putting your money in a non-cumulative fund, where the interest is earned each month without the same getting fixed for reaping the benefits of compounded interest rates. Short Tenor deposits are also effective as they allow you to liquidate the funds after a few months, as per your requirements. However, for these two clubbed approaches to work you would need something similar to the PNB Housing FD rates that are significant enough when it comes to giving decent short-term returns without overdependence on the invested sum.

A fixed deposit, without a doubt, is an extremely productive form of investment. However, quite a few individuals are still apprehensive towards FD adoption courtesy of the longer lock-in periods and the concept of time-bound returns. That said, we would still recommend fixed deposits, provided you take note of the above-mentioned hacks for eliminating penalties on premature withdrawals; not that the same is recommended.

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