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One Rs 10 Lakh FD Or 10 FDs Of Rs 1 Lakh Each? Which Option Is Better
NDTV Profit 21 hrs ago·20 Jul 2026, 1:30 am
A fixed deposit (FD) is a safe way to lock in returns, but how you structure it matters. The headline asks whether a single Rs 10 lakh FD is better than ten separate FDs of Rs 1 lakh each. While both options offer capital protection and guaranteed interest, splitting the amount into smaller chunks offers distinct advantages for the average investor.
The primary benefit of smaller FDs is flexibility. If you need to withdraw funds for an emergency, breaking a single large FD can often trigger a penalty. With multiple smaller FDs, you can break just one to meet your immediate need without affecting the rest of your portfolio. Additionally, this approach acts as a hedge against interest rate volatility. If rates rise in the future, you can reinvest your matured Rs 1 lakh FDs at the new, higher rates, whereas a single FD locks you in for its full tenure.
What to watch next is the penalty clause. Banks typically charge a penalty for premature withdrawal, which can eat into your returns. Before investing, compare the penalty rates for breaking a large FD versus a small one. Also, keep an eye on the interest rate cycle. If the Reserve Bank of India signals a rate hike, it might be better to stagger your investments to capture higher yields as they come.
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- Category: Stocks.
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