Savings is something that we are taught from a very young age and to do so we adopt several methods and measures. Some invest in mutual funds while others invest in gold or properties. There are also people who go the traditional way by saving money in different savings bank accounts. A few decades back, this method of saving money would have been enough but today, this is certainly not enough to get a comfortable life after retirement or fulfill other financial goals.
If you want to get better returns on savings, the first thing that you need to change is the way you have been saving your money. If you’re one of those people who are afraid to invest in stocks or cannot afford to invest in properties or gold, then you must consider investing in a fixed deposit.
People who wish to invest money in a fixed deposit must be careful when choosing tenure for a fixed deposit. It is because the rate of interest for a fixed deposit depends on the tenure. The rate of interest also depends on the bank polices and may range from 4 percent to 9 percent. While a fixed deposit is known to have limited liquidity, that is compensated by its high rate of interest.
Moreover, investing in a fixed deposit gives you a lot of benefits. Read further to learn the benefits that you may get by investing in a fixed deposit.
These are some of the benefits of investing in a fixed deposit. If you’re still unconvinced, read further to learn why investing your savings in a fixed deposit is more fruitful than storing it in a savings bank account.
Why is Investing in a Fixed Deposit Better Than Keeping Money in a Savings Account?
Many people think that storing money in a savings bank account is better than investing in a fixed deposit. What they don’t realise is that storing money in their bank account is not going to help them save money for their retirement plan or to reach other financial goals. Since money stored in a bank account is readily available, it will disappear before they know it. This is why it becomes even more important to invest in a fixed deposit where you have an option to lock in your money for a specific period. The list of benefits for a fixed deposit being a better option than a savings account does not end here. Read further to learn which one is more profitable for you.
If you want to get better returns on savings, the first thing that you need to change is the way you have been saving your money. If you’re one of those people who are afraid to invest in stocks or cannot afford to invest in properties or gold, then you must consider investing in a fixed deposit.
What is a Fixed Deposit?
A fixed deposit (FD), also known as term deposit or time deposit, is one of the financial instruments offered by all banks across the nation. It is one of the safest investment options as it ensures fixed returns on the invested amount. When a person invests in a fixed deposit, his/her money gets locked for a fixed period of time and earns interest till it reaches maturity. The term or duration of a fixed deposit ranges from 7 days to 10 years. It is up to the investor whether he/she wants to invest money for a few months or a few years.People who wish to invest money in a fixed deposit must be careful when choosing tenure for a fixed deposit. It is because the rate of interest for a fixed deposit depends on the tenure. The rate of interest also depends on the bank polices and may range from 4 percent to 9 percent. While a fixed deposit is known to have limited liquidity, that is compensated by its high rate of interest.
Moreover, investing in a fixed deposit gives you a lot of benefits. Read further to learn the benefits that you may get by investing in a fixed deposit.
Benefits of a Fixed Deposit
A fixed deposit is one of the oldest forms of investment options and offers a wide array of benefits to investors. Some of those benefits are mentioned as follows:- Returns Guaranteed
- Secure Investment
- Credit against FD
- Tax Benefit
These are some of the benefits of investing in a fixed deposit. If you’re still unconvinced, read further to learn why investing your savings in a fixed deposit is more fruitful than storing it in a savings bank account.
Why is Investing in a Fixed Deposit Better Than Keeping Money in a Savings Account?
Many people think that storing money in a savings bank account is better than investing in a fixed deposit. What they don’t realise is that storing money in their bank account is not going to help them save money for their retirement plan or to reach other financial goals. Since money stored in a bank account is readily available, it will disappear before they know it. This is why it becomes even more important to invest in a fixed deposit where you have an option to lock in your money for a specific period. The list of benefits for a fixed deposit being a better option than a savings account does not end here. Read further to learn which one is more profitable for you.
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