Top Reasons to Invest in Fixed Deposits

Life is full of uncertainties and hence saving money is of paramount importance. This is where the importance of fixed deposit comes into the picture. Before you continue, it is wise you know what a fixed deposit is. In simple terms, fixed deposit is basically an instrument in which the investor gives a certain amount of money to a bank. Furthermore, the bank pays the amount with interest on the deposit. The rate of interest tends to vary depending on the tenure and the amount. A fixed deposit calculator can be your perfect guide in helping you understand the interest rates. Fixed deposit is a lucrative investment option as you stand to earn great interest with the tenure:

Mentioned are some reasons that tell why fixed deposits are a great investment option:

Great returns:

One of the greatest benefits of fixed deposits is that it offers great and guaranteed returns. It is not the same as investment in the commodity or stock market. You should know fixed deposits are not a risky investment as the returns are not dependent on the fluctuating market rates. In simple terms, investors can rest assured that the investment is in safe hands. It is guaranteed that the investment gets the designated amount at the tenure end.

Flexible in nature:

Fixed deposits can be taken based on your needs. Some take it for a tenure of one month or even one year or 10 years. In simple terms, the fixed deposits can be invested for any tenure you want. You should know, if you choose a fixed deposit of five years, then it will be kept for that many years alone. The interest for the same depends upon the years you choose. For the same, you can use the fixed deposit interest calculator. It will give you a brief idea on how much of interest you are entitled to based on the years you choose.

Easy Withdrawable:

Though it is said that fixed deposits cannot be withdrawn within the tenure, you should know you can withdraw them, but with a small penalty. It can be due to any reason, whether to meet the financial emergency for marriage, education, medical purpose and so on. The penalty for the same is much less than what is there in the stock market. Fixed deposits can be withdrawn anytime, but an individual stand to lose a certain interest income.

You are highly advised to invest in fixed deposits with different banks. In this way, you do not break one fixed deposit for any emergency. Apart from this, also remember to choose the right tenure as an individual will have to consider the lock-in period too. If an individual withdraws the amount before the tenure, then the returns tend to get lower. Make use of the FD calculator to know how much you will earn from it. Furthermore, it also helps you identify the maturity amount and the interest earned when you open a fixed deposit.


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