Which one is better- yield or interest rate in FD?
Before you start investing your hard-earned money, you generally compare all the investment channels and then choose the best one. In a similar way, before investing in FD, you need to study a few factors within FD, so that you choose the right factors. Two of those factors are yield and interest rate.
To understand the difference, let us understand through stats and facts:
If a company pays a quarterly dividend of Rs. 0.50, and its stock price is Rs. 50, the annual yield or current yield is 4%. The yield value will change as the stock price or the dividend value changes. If the stock prices increase to Rs. 100, then the yield drops to only 2%.
When it comes to FD interest rates, the financial institution offers you a fixed interest on the principal amount. The rate of interest is not dependent on the market’s condition and it remains secured until the investment matures. The interest gets added to your FD every year and then it gets compounded to the next year’s outcome.
What is interest rate of an FD?
If you invest a certain sum in a fixed deposit plan, you will receive an annual interest, that can be up to 8.60%. On the basis of this interest rate, your ROI will be decided. A financial institution offers FD interest rates of 8.60% for 36 to 60 months tenor to their customers.
To understand the difference, let us understand through stats and facts:
If a company pays a quarterly dividend of Rs. 0.50, and its stock price is Rs. 50, the annual yield or current yield is 4%. The yield value will change as the stock price or the dividend value changes. If the stock prices increase to Rs. 100, then the yield drops to only 2%.
When it comes to FD interest rates, the financial institution offers you a fixed interest on the principal amount. The rate of interest is not dependent on the market’s condition and it remains secured until the investment matures. The interest gets added to your FD every year and then it gets compounded to the next year’s outcome.
What is interest rate of an FD?
If you invest a certain sum in a fixed deposit plan, you will receive an annual interest, that can be up to 8.60%. On the basis of this interest rate, your ROI will be decided. A financial institution offers FD interest rates of 8.60% for 36 to 60 months tenor to their customers.
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