Fixed Deposits: Helping you Save Better
A lot of times you would come across people who would ask you to invest your money in a Fixed Deposit account. So what exactly is a fixed deposit? Fixed Deposit or FD is kind of a fixed deposit that offers you fixed rate of interest until maturity. By investing in FDs one can save and earn money at the same time. It also affords you with higher rate of interest when compared with a regular savings account. Apart from these, there are many other advantages of opening fixed deposit account online.
Listed below are some of the advantages of opening a FD account:
1.Guaranteed Returns –
If you put your money in a fixed deposit account, you are guaranteed to receive a return. You will be eligible to get interest on your deposited amount, however, the rate of interest depends on the tenure you have selected. Banks and other financial institutions across India usually offer interest rates ranging from 4.5 to 8.5 percent on Fixed Deposits.
2.Easy Withdrawals and Savings –
When you open a fixed deposit, you can withdraw your deposited amount any time. However, banks may charge you a small penalty in case of premature withdrawals. Overall Fixed Deposits help you develop a positive habit of saving money for greater good of yourself and your family members.
3.Better Interest Rates –
Interest rates offered on fixed deposits are always higher than the interest on Savings Accounts. Therefore, the growth of your money in a fixed deposit is the more lucrative.
4.A savior during emergencies –
In case you are stuck with an unprecedented emergency and you need money, a FD can be really handy. Many banks offer you loans against Fixed Deposits. Up to 90% of the deposit can be dispersed as loan. Certain banks afford you with partial withdrawals of FDs too.
5.Aids in risk management –
Financial instruments like gold, mutual funds, etc. may give you high returns, but are also very unstable. To balance this risk, it becomes imperative for you to invest in debt instruments. FDs help with managing this risk as the returns are fixed.
6.Easy to access –
You can withdraw the amount in the fixed deposit at any point of time. In case of premature withdrawals during emergency, banks may levy a small penalty.
7.Provide flexibility –
Fixed deposits come with flexible durations. FDs provide you with the flexibility of fixing your money over a period of time. Yes, fixed deposits come up with n-numbers of tenure duration which ranges from 7 days to 10 years. However, the tenure options would differ from bank to bank. Some financial institutions also provide an option of opening a FD for period as less as 7 days. It is not necessary for you to have an account with a particular bank to open a FD account. However, every bank has their own tenure criteria but as an individual, you can opt for an FD in any bank of your choice based on your requirements, whether you hold a bank account or not.