Fixed deposits are high-interest yielding term deposits and they are a better option than having your money in a savings bank account. All you have to do is put a certain sum of money as per your capabilities for a certain term as applicable by the financial institution and the financial institution will pay you interest for the duration of the deposit. The basic sum and the interest will be made available to you once the term is over. The rate of interest on a fixed deposit varies from banks to banks and you can check here for more info about bank promotions.
Reasons For Investing In Fixed Deposit –
If you have a certain sum of money that you know that you are not going to need and use over a year or more, there is no reason why you should have that money with you or in your savings bank account. Whatever money you have with you that you will not need in the near future, it must be invested to make it grow for the duration. Fixed deposit is the best option for investing your money because of the following reasons.
Higher Returns – Though different banks or financial institutes have different fixed deposit interest rate but there is no denying the fact that such interest rates are always higher than that you get by having your money in a savings bank account. Therefore, fixed deposit comes out on top as the best investment option for a certain term. As a matter of fact, there are various bank promotions available like different rates for senior citizens, different rates depending on the term and likewise. You can check here for more info about bank promotions.
Guaranteed Returns – Another reason why it is better than the rest of the investment opportunities is that you can earn guaranteed returns. Some people invest in mutual funds and other speculative schemes which do not have any guaranteed return. The return can be higher than your basic sum or even lower than it. There is always a risk factor involved. The same is not applicable for fixed deposit.
Easy Withdrawal – Unlike various other investment options, you can withdraw from fixed deposit at any point with a small penalty. The penalty is negligible and it will come extremely handy in case of emergency and unforeseen financial situations. If you think about it minutely, you will understand that the penalty will be cut from your interest and hence, you will get the basic sum as well as the interest up till that day after the deduction of the small penalty.
Flexible Plans – There are different durations available according to which you can invest your money in a fixed deposit. For example, if you think your money may be needed after a year or two, you can do a fixed deposit of 1 or 2 years. Then again, if you do not need it after its maturity, you can renew the term and go for FD once again.
