Bangalore: It is always better to invest in the fixed deposits before the interest rate cycle changes. But before investing in the fixed deposit is essential to know the do’s and don’ts about it. Economic Times Wealth has listed the key points that one needs to know before investing in the fixed income options.

FDs are not always safe

Its not right to assume that the money is completely safe when one invests in a fixed deposit. Corporate deposits are considered as unsecured loans which doesn’t guarantee anything to the investor but atleast incase of the deposits in the banks, like the Deposit Insurance and Credit Guarantee Corporation insures deposits that are up to 1 lakh per customer across all branches of the bank.

If an individual has an amout of almost 3 lakh to invest then he or she must split it up into 3 to 4 investments across different banks. This will safeguard the investment and there will be an added advantage, that is, if you need the amount back in case of an emergency then it won’t be necessary to break the entire deposit. Which means that one has to pay the premature withdrawal penalty only for the sum that he needs and the rest will be still fixed and will keep growing.