Top Reasons Why You Need To Invest In Fixed Deposits

Nov 22, 2021 - 11:08 AMAuthor - Kenneth

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A Diversified investment portfolio with reduced risks and surety of long-term returns is one of the main concerns of an investor. Here, both high-risk and low-risk instruments are worth paying attention to. On one hand, high-risk instruments can reward you with higher returns while low-risk ones can ensure your stability. At this point, almost every single person has some sort of financial advice for you but thanks to the internet, now you have a myriad of investment plans that you can compare and choose the best one. One of those best & low-risk investment plans is none other than “Fixed Deposits”.

They are the oldest and safest form of investments especially compared to stocks or any other market-linked instruments due to their surety of returns and low risk. If you are a risk-averse investor, FDs should be included in your investment portfolio.

Here we are explaining the top reasons to know why FDs are the best form of investments:

Assured Returns Without Risks -

Unlike any other investment plans, FDs are the most secured investment tool which doesn’t get affected by market fluctuations. It comes with less volatility ensuring that you can get your amount of return is safe and you are eligible to get it once it gets matured. It makes it a reliable & go-to option for investment.

Savings Increase At A Substantial Rate -

Another benefit of investing in fixed deposit services is that they also help you earn a regular source of income by allowing you the options of cumulative & non-cumulative interest rates. It means it is up to you in what significant period you want to get your money. For example, you can receive the interest payouts at regular interest levels like half-yearly, or yearly to set off your financial debts like EMIs, bills, etc. Or you can get your capital locked up for a particular period to get the return with compound interest.

Get Loan Against FD -

If you are facing a financial crunch and need immediate funding to cater to your money needs, an FD enables you to do that by facilitating loan options against the amount that you have in your FD account. Various banks and financial institutions offer a significant loan amount that can vary depending on their respective rules & regulations. This fact makes FD a more secure option where you don’t have to liquidate your assets or even FD to meet your needs.

Diversified Portfolio Risks -

Being an investor, you are probably maintaining an investment portfolio having several types of investments, ranging from equity, fixed income instruments, gold, etc. They all differ in terms of returns, risk, periods, and many more. Adding foreign currency fixed deposit services will help you reduce/diversify your risk by ensuring your long-term financial stability through guaranteed returns.

Less Complex Investment Process -

Another reason that proves the impotence of FD as an investment option is its requirement of a minimum balance that can vary from bank to bank. Furthermore, many banks also offer the facilities such as multi-deposit facilities where you can invest in several FDs at once with a single cheque. It eliminates the hassle of maintaining various multiple investments with different amounts, tenors, and payout nature.

Short Term Goals Fulfillment -

Since FDs offer you a fixed return on their maturity, it will be a great move to invest in them to cater to your short-term goals that can’t wait and you need a significant amount of money within that time frame. For example, you need Rs. 2 lakh for your international trip within two years. Now you know this tenure as well as the receiving money you will get from an FD account after the maturity period ends. So, you can just compare interest rates and initiate a contributory move towards your goal by depositing in an FD. Here, (SIP Systematic Investment Plan) is also a good option. Know SIP Vs FD - Which is Better?

Flexibility in Fund Withdrawal -

Last but not least reason for adopting FD as an investment plan is its flexibility in withdrawing the funds in case there is an emergency and you need your deposited money immediately. However, you will need to pay some amount of penalty but you can get your money back in a financial emergency.

Being an investor, you always look for secured & reliable investment options that provide you a surety in returns with zero or fewer risks. A fixed deposit is an option that meets all of your requirements. Moreover, the nature of FD serves investors looking for both high-risk and low-risk returns based on cumulative and non-cumulative plans.

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