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Investment in Fixed Deposits

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(Querist)
07 January 2023 Dear Sir,

As banks are now offering fd interest rates at around 8%, is it advisable to redeem existing fd's and make a new fd with higher rates after taking into effect premature withdrawal rate deduction and the tax to be paid on interest earned on fd redeemed.

I had booked the FD previously at 5.5% interest rate.

Please suggest.

Regards,
Divyesh Jain
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Manish

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Manish (Expert)
07 January 2023 Compare the interest amount foregone for the remaining term of FD with the new interest amount at the new interest rate on the new principal amount for that remaining term.

Interest foregone = Total interest for the full term - Net interest given by the bank for the elapsed term.
New principal amount = Original principal + Net interest given by the bank for the elapsed term - TDS
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