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Also I want to know that if my custom domain is nothing but one of the keywords and my blog is also about that keyword, so will this help in improving google ranks of my blog after I change from example.blogspot.com to customdomain.com.

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In the long term, your own domain will help. Having your own domain gives you a lot of power to build a "brand". Google likes to rank sites that have a brand that people talk about, link to frequently, and generally think highly of.

When your blog is just starting out, your own domain name won't make much of a difference. In fact, I've seen some evidence to suggest that blogger blogs that use a blogger sub-domain sometimes get ranked higher than they should because they inherit some branding from blogger itself.

I wouldn't worry about this question from an SEO standpoint. Instead, I'd say that the best reason to get a domain name is the flexibility to move away from blogger if you wanted to. If you ever wanted to host your own blog or move to a different platform such as WordPress, then having your own domain name makes such a move possible. At that point you could import the data from blogger and change the domain name to point to a new host.

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