Special Period Deposits: Here’s Why They Could Be Good For You

Fixed deposit interest rates have been rising in the Indian economy and this has meant good news for investors seeking better returns on their debt exposure. The rise in the bank fixed deposit rates has meant that the traditional investment option has once again become attractive.

The features of a bank fixed deposit, which involves easy handling, proper understanding and high comfort levels means that this is often high on the watch list for investors. Getting the most out of the higher rates is important and investors can do this by looking at special period deposits. 

Special period fixed deposits are those that are issued by banks for a specific time period only.

Normally, an investor can make a fixed deposit for any period they wish. For example, if an individual wants a 15-month deposit and another wants a 19-month deposit, both are available in the market.

The investor has to accept the rates prevailing in the market when they invest in a fixed deposit.

When it comes to a special period deposit, the difference is that the bank announces such a deposit with a differential or a higher interest rate.

For example, banks announce special period deposits for periods like 400 days, 555 days, and 599 days. The period will be different for each bank depending on the time period for which they need the funds. The interest rate offered is usually higher in order to incentivise investors.

One feature of the special period deposits is that these might not be available for the investor at all times. Normally, there is a limited time period for which such special offers are introduced by banks.

It is also seen that such deposits come during periods when banks want to collect higher deposits and this often happens when the interest rates in the economy are higher or heading higher. This adds an element of attractiveness because the investor finds higher interest rates for which they can lock in their money.