One FD of 10 lakh or 10 of 1 lakh each? Know this secret before investing, otherwise loss may occur

Fixed Deposit (FD) is still considered the safest and most reliable method of investment. There is no risk of market fluctuations and the amount to be received on maturity is also fixed in advance. But when it comes to investing a big amount, like Rs 10 lakh, people often get confused. The question arises whether one should make only one FD of Rs 10 lakh, or would it be more beneficial to make 10 different FDs of Rs 1 lakh each? Let us solve this confusion. What is the difference between interest and maturity? If you make an FD of Rs 10 lakh for 10 years at 7 percent interest rate, then on maturity you will get approximately Rs 20,01,597. At the same time, if you make 10 different FDs of Rs 1 lakh each with exactly the same tenure and interest rate, you will still get a total of Rs 20,01,600. That is, from the return point of view, there is no significant difference between both the options. The only advantage of a lump sum FD of Rs 10 lakh is that you have to manage only one account, which reduces paperwork. What if you suddenly need money? Despite the returns being similar, financial experts believe that it makes more sense to have smaller FDs. The biggest reason for this is liquidity i.e. availability of money in emergency. If in future you suddenly need Rs 1 or 2 lakh and you have made a lump sum FD of Rs 10 lakh, then you will have to break the entire FD. Due to this, not only will you have to pay penalty, but there will also be huge loss of interest on the remaining amount. Whereas if you have 10 different FDs, you can break only 1 or 2 FDs as per your need, while the remaining FDs remain safe. Security of money and benefit of higher interest: Another big advantage of making a small FD is that you can invest your money in different banks. Interest rates of every bank are different, so you can take advantage of the best offers. Apart from this, as per the rules, under Deposit Insurance and Credit Guarantee Corporation (DICGC), in case of closure or sinking of any bank, insurance cover is available only up to a maximum of Rs 5 lakh. In such a situation, by dividing your money into different small FDs, your money remains completely safe. Ultimately, it depends on your need and risk appetite which option you choose.