A fixed deposit is among the most popular investment options. People opt for fixed deposits because it offers a safe and straightforward way to protect your savings and get interest benefits in return. In this blog, we are discussing in details why you should consider investing in a fixed deposit:
- Fixed Returns
The primary reason why people choose to invest in a fixed deposit is due to the assured return that they get. Once you have opened a fixed deposit account, you can be rest assured of getting back the predetermined rate of return. Similar to the return of a premium savings account, banks reveal the interest rate of their FD on their official website. You also get an FD interest calculator with which you can calculate the interest amount you will be getting on investing a particular amount of money for a specified period of time.
- More Savings
In these unpredictable times, we cannot stress the prominence of savings. And a fixed deposit account is one of the best ways to save your hard-earned money. It encourages you to save a lump sum amount for a particular period of time. Since premature withdrawals are subjected to penalties, you end up saving money. And when you have a significant amount as your savings, it can help you in achieving your financial goals. Additionally, savings in FD also proves to be helpful in emergency situations.
- Option To Take Loan Against Fixed Deposit
If you have a fixed deposit account, it can prove to be a great finance option in emergencies. A fixed deposit account holder takes a secured loan against the fixed deposit. Moreover, loans against FD are charged with a small interest percentage. This way, you do not have to bear significant interest rates and do not have to compromise on your FD returns.
- Easy to Liquidate
The banks offer to differ tenure options for fixed deposits. This gives you the flexibility to choose the deposit period that you are comfortable with. Once the FD period is expired, you can either choose to redeem the amount or extend the savings. Moreover, it is easy to liquidate your FD account as well. If you have taken a fixed deposit online, you can liquidate it through your net banking. If not, you will have to visit your branch to liquidate the same.
- Tax Benefits
Banks do not charge tax on interest collected by FD until it moves over Rs. 10,000. This implies that unless your overall interest amount on various fixed deposits exceed Rs. 10,000, the bank will not charge tax. This allows you to get the maximum return on your investment.
In India, a fixed deposit is the most sought-after investment option. And above are some evident reasons why people rely on FD. Different banks offer various FD interest rates, offering you flexible saving options. When you are assessing a fixed deposit option, make sure to read through the terms and conditions thoroughly. This will allow you to be aware of any conditions that might restrict the benefit of your savings.