Fixed deposits [FDs] have always been lucrative investment instruments offering reasonable interest rates and good security. However, the Reserve Bank of India (RBI) had lowered the repo rate to 4.00% on May 22, 2020.

This will result in lower returns from your FD. You should also note that interest rates may reduce further. So, here are five strategies that you can implement to maximize your returns from FDs.

1. Limit risk exposure

When investing in an FD, you must opt for a trustworthy issuer. You can determine this by checking the provider’s safety rating, which indicates the chances of default. You should also check if their past performance has been good.

2. Divide the FD investment

Even if you secure safe fixed deposit interest rates from different FDs, it is always wise to diversify the investment in terms of tenure. You can make one long-term FD investment and then start a few short-term FDs. This way, you will not have to prematurely withdraw the entire fund in case of an emergency.

The long-term FD can be used to meet a significantly large financial goal, like making a down payment for a new home. Short-term FDs are perfect for meeting a smaller target, like a holiday with the family.

3. Choose a non-banking issuer

Choosing the right FD issuer is a very important aspect of investing your hard-earned money. A non-banking issuer can offer relatively higher returns than a bank, including value-added services like a higher return for employees, multiple FD types, nominations, and easy renewals.

4. Assign a nominee

The fixed deposit eligibility criteria allows any adult to invest in a Fixed Deposit. It is quite easy to get an FD account; however, you should assign a nominee to ensure that the investment serves its purpose. Make sure that your loved ones receive the returns from the FD in case of your absence. Opening a joint FD account with the ‘Either or Survivor’ option can be a smart idea; it can allow the joint holder to manage the deposit if the primary holder passes away.

5. Invest for older family members

FD interest rates depend on the age of the investor. You should note that senior citizens can avail of a higher rate. For example, Mahindra Finance offers 0.25% extra interest to people over the age of 60. So, you can enjoy this benefit if you invest in FDs for your parents or grandparents.

Before investing, you should compare FD interest rates from different issuers to find the most suitable option. Following these tips will certainly help you earn stable returns without facing huge risks.

We all dream to reside in our own home. You may have also planned on buying one or put off the plan owing to the lack of funds. In times of such financial emergencies, home loans help us circumvent the lack of money.

A home loan, when managed well, is the biggest realization of such dreams. One thing you are unaware of such loans is that it can help you in various other ways as well. There are some hidden features with these loans that can be availed by home loan customers.

Here are some extra features that the home loans can provide to you other than buying a property.

Access to Top-up loans

If you are a home loan customer, you got an added advantage. Home loans give you access to top-up loans. You can utilize the fund of this loan to fulfill any of your financial needs. Top-up loans are similar to personal loans, but with a lower interest rate.

This way, you can also avail a sum of up to 50 lakhs! To be eligible for a top-up loan, you need to have availed a home loan from a bank.

Tax Relief

Housing loans are one of the best ways to save taxes. Aside from helping you to buy your dream home, these loans can also help you with minimizing the tax deductions. If you have any co-borrowers, they can also avail the benefit!

The sections 24 & 80C of Indian Income Tax Act highlights that you can claim deductions of Rs. 3,50,000 against the interest & principal amount repaid in a year.

Home Renovation

To cover the funds for the home renovation, people choose personal loans. But, opting housing loans for the home improvements can save you from a higher interest rate of personal finance solutions.

The banks usually charge the same rates as their housing loan products for this. The interest rates are much cheaper ranging from 8.30 to 10 per cent.

Boosting the Credit Score

Paying the loan dues on time can tremendously improve your credit score. A good to excellent credit score can help you to qualify for the credit cards with the best rewards.

This score is pivotal for you to get better financial solutions. If you don’t delay or skip paying loan repayments, your credit score will improve.

If you are planning to avail a home loan, being well-informed about these features that it offers you can be extremely helpful. Plan well with the above-mentioned points before applying for a housing loan to completely utilize the features of the loan.

Are you an extremely conservative equity investor who is looking to grow their investment without too much volatility over a long period? If yes, you might want to consider investing in aggressive hybrid schemes.

But, before we delve into aggressive hybrid funds, let’s understand what a hybrid fund is.

What is hybrid fund?

Hybrid funds are a type of mutual funds which is an amalgamation of equity and debt securities which is designed to meet the investment objective of the scheme. These funds achieve diversification across asset classes while avoiding concentrated risk. A perfect blend of two asset classes, these funds aim at giving returns similar to equity funds while trying to mitigate the risk like debt funds.

What is an aggressive hybrid mutual fund?

An aggressive fund is a type of hybrid fund. It is a balanced fund that primarily invests in stocks with a small proportion of allocation to fixed-deposits. As per the Securities and Exchange Board of India [SEBI], aggressive mutual funds have to invest a minimum of 65 to 80% of their assets in equity securities and the rest in debt instruments.

How do aggressive funds work?

Since the aggressive hybrid funds have a portion of a debt instrument, they are relatively less volatile and less risky than pure equity mutual funds. Therefore, an investor who can tolerate some level of risk in the investment can consider investing in aggressive hybrid funds. Since the fund’s concentrated allocation is of equity instruments, it can also be called as a hybrid equity fund.

Who should invest in aggressive hybrid funds?

Aggressive hybrid funds aim at generating current income along with wealth generation over a long duration of time through a hybrid portfolio composition. These funds have the of yielding higher returns at a relatively higher risk than regular balanced hybrid funds. The fund manager tries to offer consistent returns by investing primarily in equity securities and a small portion in debt and money market instruments.

Hence, aggressive hybrid funds are best suited for investors who have a moderate risk appetite and medium-term investment horizon, say at least 5 to 7 years. Also, an investor who wishes to invest in equities, but at the same time yearns to take a safer route can consider investing in these hybrid funds.

Budding investors who are new to the investing world can give these funds a try. Even within the same category, the level of risk among aggressive funds could vary depending on the existence of small-cap and mid-cap stocks.

While picking funds for investing in hybrid mutual funds, the qualitative and the quantitative aspects of the fund should be analysed. Opting for hybrid mutual funds can act as a gateway towards mutual fund investments. Happy investing!

When you first think of getting a personal loan you approach a bank or NBFC for the same. During the loan process, the lenders run a check through your credit history and CIBIL score, subsequent to which a decision on loan approval will be taken. Hence, it is advisable to manage your credit and ensure that your financial decisions do not have a negative impact on your score.

A good credit score will get you competitive interest rates on your loan. So, here are a few ways to get a personal loan without hurting your credit score.

Avoid applying for a loan with multiple lenders or DSAs

The financial market has a lot to offer when it comes to loans. Many lenders claim to offer the best rates on loans. Whilst you’re promised the best rates, your interest rate will, however, be dependent on your score, and repayment history. Along with a good credit score, other factors like your income and age are also considered. Approaching DSAs [Direct Sales Agents] for your loan might be risky as DSAs send your application to multiple lenders.

This will lead to multiple credit checks which are symbolic for credit hungry behaviour. Hence, it is best to avoid approaching too many lenders to get better interest rates and simply risk your credit score.

Familiarize yourself with the available deals on loans

It is always a good idea to do research and look at all the options available to you. This will help you decide whether the lender you are applying for will be able to offer good deals.  Ideally, you would want a lender that offers lower interest rates on a personal loan. So, have a look at the financial market, search through various lenders and make your decision wisely.

Choose a lender based on your credit profile

If your score is high, you will be eligible for low-interest rates on loans from reputed, private lenders. On the other hand, if you have a low credit score with multiple instances of late payments in the past you will be seen as someone who is not creditworthy and find it hard to avail a personal loan.

However, you can still avail a loan with a low CIBIL score, simply opt for a lender with easy eligibility criteria. There are many fintech companies that offer loans to individuals with low scores. The idea here is to choose a lender that will approve your application based on your current credit profile making it easier for you to avail a personal loan.

Opt for pre-approved loans

This is one good option to avail a personal loan with ease. If you are an existing customer and have a savings account with a particular bank for over 5 years, the bank does not resort to performing a hard credit check while processing a loan application. Based on your current financial track record, a pre-approved loan offer is made.

This will help you in avoiding any uninvited hiccups in your credit profile while availing loans in the future. The interest rates on pre-approved loans are generally less, this a plus point for the customers who’ve had long-term relationships with their respective banks.

Having a good credit score is important as far as getting your loan application approved mainly because personal loans are unsecured loans which mean no collateral or security is asked for. Your credit score is perhaps the most basic factor that helps a lender decide whether or not you are worthy for a loan.

The economic growth of India had started moving at a slower pace even before the outbreak of the COVID-19 pandemic leading to a rise in salary cuts and job losses. Owing to this situation, people are more concerned about meeting their daily expenses. This has led to a rise in demand for consumer lending products. Indeed, reports show that there has been a spike in the outstanding balance on credit cards and personal loans.

A report from the India Retail Credit Trends by TransUnion CIBIL highlights that the consumer credit grew in Q3 of CY 2019 with a spike in demand for categories such as personal loans and credit cards. The new account volumes of personal loans have also recorded a tremendous growth of 133.9% in Q3 2019 as consumer demand for the credit product continued to accelerate.

The new accounts increased by 48 per cent between the third quarter of the calendar year 2019 and 2018. The consumption lending categories of credit cards and personal loans recorded growth rates of 40.7% and 28.0%, respectively in the third quarter of 2019.

Amid this economic slowdown, the personal loan balances managed to grow in Q3 2019 compared to the previous year by 28.0%. Not only that but also balances in semi-urban/rural locations and metro/urban locations has been increased by 31.5% and 25.8% respectively. Another interesting fact is that, of all the personal loan acquisitions, 42.6% were from individuals under the belonging to the age group of 18-30 years.

The spike in personal loans and credit cards may be due to salary delays due to the economic slowdown which forces people to borrow from their credit cards or loan lenders to make ends meet. The origin volumes of the loan accounts have doubled have more than doubled over the third quarter of 2018. This has increased by 2.9 times in Q3 2019 over Q3 2018.

Consumer inquiry volumes for personal loans and credit cards increased significantly over the period, though the enquiries for the other loans remained unchanged or the same.

The minimum personal loan rate in India stands at 10.50%. Most of the banks offer personal loans to their customers with minimum paperwork and documentation processes. To apply for a personal loan, all you need is a basic identity proof and the income certificate along with a photograph, bank account details, and residence proof.