FD Strategy: One 10 Lakh FD or Ten 1 Lakh FDs? Maximize Benefits!

• Indians prefer FDs for safety and assured returns, but how to invest large sums?
• Mathematically, total returns are similar for a single 10 lakh FD vs. ten 1 lakh FDs at the same interest rate.
• A single 10 lakh FD carries risks: premature withdrawal penalty on the entire amount and only 5 lakh insurance cover if the bank fails.
• Splitting into ten 1 lakh FDs offers liquidity, allowing partial withdrawals without penalizing the whole amount.
• Split FDs enable diversification across banks for better rates, enhanced security (5 lakh insurance per bank), and better tax planning (TDS).