The Right Time, Strategy And Amount For Investing In Fixed Deposit Schemes

There is a right time to invest in fixed deposits. There is a right strategy and right amount to invest in FDs too. Both of these will depend on your financial situation though. Yet, there is a way to optimize it under normal circumstances. Hence, you should always consider before investing in fixed deposits.

When is the right time?

When high risk investment tools are too volatile, invest in FDs. There are multiple reasons for this kind of an action plan. Local events and international low cues can send the stock market and the mutual funds stumbling down. This is the time to invest in safe tools like fixed deposits. Do not risk your funds in such challenging times.

What is the right strategy?

Today’ fixed deposit market is highly competitive. The right strategy for a FD, ideally, is to optimize all the important aspects of a fixed deposit scheme . You need to understand them and optimize them as per your financial priority. These important aspects are:

• Interest – This is the most important one. Yet, there are cases where people prefer to open a fixed deposit account without the highest interest because of the priorities mentioned below.

• Premature withdrawal penalty – This is an expense most of us will like to avoid. If you can need the invested funds again, you must invest in the organization that offers no or low penalty.

• Return strategy – The available options are monthly, quarterly, annual interest payment or reinvestment option. The most suitable choice for your requirement should be available.

• Overdraft facility – Most business owners look for a fixed deposit with this facility. It allows them to enjoy the returns and use it as collateral in troublesome times.

• Convenience – Most people prefer to invest with their retail banking partner. However, today, nationalized and private banks allow customers to open a fixed deposit account through the online medium, which is the most convenient and rewarding choice for busy people.

What is the right amount?

The Reserve Bank of India (RBI) mandates that nationalized and private banks must insure all the fixed deposits up to Rs. 1,00,000/. If you invest Rs. 2 lakh, you are insured up to 50% of your amount. If you invest Rs. 1, 00,000 in two different banks, you are insured 100%. If you want to invest in this popular and safe financial product, the right amount is in multiples of Rs. 1, 00,000. This strategy lowers the risk and helps retain the returns.

Types Of Fixed Deposits In India

There are four different types of fixed deposits in India . Traditionally, most people are aware about the term deposit when it comes to banking. However, you have a lot more choices available, which are based on the organizations that offer them. Some of these options are as mentioned below:

1. FD with Banks

When you talk about a Fixed Deposit or a term deposit, most people turn to these organizations. Nationalized, co-operative, private sector and foreign banks all provide various fixed deposit schemes , the duration for which can vary from 7 days to 5 years. Along with these variable tenures, they offer different interest rates and other facilities such as overdraft loans as well. You can take the interest on a monthly, quarterly or yearly basis or reinvest it all back in the deposit.

2. Mutual Funds

Typical mutual funds are not fixed deposits. They are more like equities in the stock market. However, these AMCs (Asset Management Companies) also create products known as Fixed Maturity Plans. Like FDs, these plans have assured returns. However, it is a close-ended scheme, which you can enter only when it is launched. They also have huge exit loan amounts similar to the premature withdrawal penalty on FDs.

3. Company deposits

This option is offered by companies, financial institutions or NBFCs. This is a customized fixed deposit, where the rate of interest is determined by the respective organization. These corporate or company deposits are considerably riskier than bank FDs. However, these deposits offer much higher interest rates to compensate the potential higher risk.

4. Indian Postal Services

A fixed deposit with the Indian Post is similar to the one with a bank in terms of the interest rates that it offers. You can open the account for tenure of 1 to 5 years. These FDs also have penalty for a premature closing. While this may seem similar to what banks offer, it can be an inconvenient option given that several banks offer online services for the term deposit.

If you want to make a long term investment in a non-stock market tool, then investing in FDs is a great choice. All these investments are good tools that could suit your needs well. However, you will also need to consider the organization, interest rates and premature withdrawal penalty well before consenting to either of these options. Most people overlook these factors and make investments in the bank that handles their personal banking. However, research can allow you to choose much better options as well.

Tenant’s Guide to Switching: Your Rights

Your lease outlines all your responsibilities as a tenant on the rental property. The lease states who is responsible for all bills associated with the rental property including the power bill. As tenant, you have the right to switch providers if you are the one paying the bill. When the landlord pays the bill, you are stuck with his choice.

Lease Restrictions

Your landlord may attempt to require a specific energy provider in the lease. Landlords cannot prohibit the tenant from shopping around for a better deal and changing energy providers for the rental unit. Your landlord can require notification of the switch in providers in the lease contract. Make sure to check your lease to see if you have this requirement in your contract before switching.

Landlord Paid Utilities

Some landlords offer to pay the energy bill as part of your lease contract. You pay your rent and electricity directly to the landlord who then pays the bill. When the landlord foots the bill, you have no right to switch companies. The landlord gets to choose who to use and whether to switch. You can make suggestions but the ultimate decision lies with him. Keep in mind that there is a maximum amount your landlord can charge for your energy consumption. Your landlord cannot overcharge you for energy in order to make a profit. If you are concerned you are paying too much, contact the energy provider for information on the maximum resale price.

Tenant Paid Utilities

The landlord must state in the written lease whether you are responsible for paying for your energy for the rental property. For tenant-paid utilities, you can switch between energy providers at your discretion. Make sure to shop around for the best deals to ensure you save each month. There are many factors which go into the types of energy used, the types of meters used and the total cost of consumption.

Make sure you call the energy company when you move in to have a new meter reading taken on your move-in date and to switch the bill into your name. Failure to get a meter reading results in you paying for the previous tenant’s energy consumption.

Three Types of Energy Meters

Rental properties come with three types of meters: prepayment, economy and regular credit meters. Regular credit meters and prepayment meters are the most common and directly refer to your method of payment for energy.

Prepayment meters are popular with landlords because of the decreased risk in default. Prepayment meters require you pay for your energy before you consume it. You add a credit card or prepay your energy and pay for it as you use. Prepayment meters are the most costly of the three energy meters but comes with the least risk for the landlord.

Regular credit meters are the most commonplace. You consume energy through your monthly use of your property and power needs. Every month, you pay receive a bill showing your consumption and a bill. You pay your bill and the meter resets for the next month.

Economy meters are the least common of the three and not commonly used in rental properties. Economy meters are a special type of tariff where you pay a different price for the power used at night in comparison to the power used during the day time. Economy meters are an excellent way to pay less on your energy consumption during the night time.

Tenant’s Guide to Switching Energy Providers

Call your current energy provider to find out how much you currently pay on your energy bill and your average monthly consumption. Shop around to the other energy providers to get a quote on how much they charge for your average monthly consumption levels.

Sign up with a new provider. The new provider gives you a start date for your new energy service. Contact your current provider and cancel your service effective on that date. Your new supplier takes a meter reading and sends that information to your old supplier for your last bill. Pay off your last bill and you complete the switch.

If you switch during your tenancy, make sure you switch back to the original energy provider listed in the lease when you vacate the property. Return the property to the landlord in the condition that you received it.

Getting More From Oil Boilers – Keep Your Home Warm for Less

Oil boilers have been a popular alternative for many years. They’re an affordable option for older homes currently stuck with coal boilers. They’re also a great solution for homes without a gas fuel connection. Oil heating has several advantages and you can get even more from them with a few hints and tricks.

The Advantages of Oil Boilers

An oil fuelled boiler easily heats a three-bedroom home for approximately £1,355 annually and emits four to five tonnes of carbon. They can reduce your energy costs by up to 85% when new, but only 60% to 70% for older systems. A new condensing model, however, can save 92% or more and supply your home with hot water.

Regardless of which system you choose, building regulations require all oil-fired boilers to have an efficiency rating of at least 86%. If your system doesn’t meet these requirements, you can opt to upgrade to a new one. Alternatively, you can further increase the energy efficiency of oil boilers by making a few changes.

Improving the Energy Efficiency of Oil Boilers

To keep an oil-fired boiler working as efficiently as possible, it needs regularly maintenance and cleanings. You need to keep the lines properly insulated and free from sediment. You can also reduce the amount of oil needed to heat your home by turning down your home’s thermostat. In the summer, condensing boiler systems can use more fuel than it needs, consider turning the hot water temperature down to approximately 49 degrees Celsius or 120 degrees Fahrenheit to save fuel.

Retrofitting is another way to improve the energy efficiency of an oil boiler. Vent dampers and barometric flue dampers prevent the system from losing heat through the chimney. In an older boiler system, the burner often becomes inefficient. To rectify this issue, replace it with a flame retention burner that can stop the airflow up the chimney.

To reduce the amount of fuel the heating system needs to run, consider changing out the existing nozzle with a smaller one. However, you may also need to hire an experienced professional to reconfigure the combustion chamber and adjust the fuel pump pressure. It’s a big job, but it’s a great option if your home heating system is too large.

Hot water boilers have a few additional retrofit options. For example, a time-delay relay will circulate the hot water through the system without turning on the boiler. Then, it will fire up the boiler at a set time, which can reduce fuel consumption by up to 10%. An aquastat can help you save an additional 10% of your fuel costs by adjusting the water temperature according to the outdoor temperature.

Keeping the Warmth Indoors

While older homes are often quite inefficient, you can take steps to further improve the energy efficiency of newer homes as well. Insulating your home’s loft and walls with products like sheep’s wool or wood fibre can greatly improve the warmth of your home while limiting your carbon footprint. Filling in gaps in the chimney and walls can also help reduce energy consumption. Alternatively, you may want to install a wood stove to offset some of your fuel costs and make your home more comfortable.

Not all energy saving ideas have to be expensive and require a lot of work, however. For example, using insulated drapes or blinds can help keep the cold out and the warmth indoors where it belongs. In the colder months, you simply have to close them at night and open them to let in the sun’s warmth during the day. In the summer, do the opposite to keep the house cool. Outside, consider planting deciduous trees around your home. They’ll shade your home and keep it cool in the summer, but let the sun in during the colder months.

Oil boilers can be an excellent heating system, but you can make them better by improving the energy efficiency of the heating system and your home. Even the smallest steps you take to make your home more energy efficient can have a noticeable effect on your home’s oil usage. And if you choose products made of renewable resources, you can further reduce your carbon footprint.