Why Old School Fixed Deposit Still Prevails as an Investment Option
It doesn’t matter whether you are sailing through your mid-career, just starting your life or are on the verge of retirement. Life is always unpredictable and we do not know where the roads will take us. So, it is always important to look forward and plan for your future to ensure that you are financially well protected. Investment is one of the essential aspects of our life. Today, the market is flooded with many investment tools which offer the best results. However, still, most of them prefer going with those old school fixed deposit schemes. The fixed deposit has been one of the famous and trustworthy investment tools for the people of all age groups. It is a unique term deposit which is offered by banks. If you are salaried and is willing to make savings for a particular period, fixed deposit is an excellent way to save money.
What is a fixed deposit?
Fixed deposit is principally locking away a lump sum amount in your bank. It is a low-risk investment made for a specified period and offering fixed income at the end of the term. At maturity, both the principal and the interest are returned to you. The bank may even let you break open the lock before the maturity period, depending on their terms and conditions. This is for the people who do not wish to take high risks and want to have fixed interest rates on income. It is quite popular with conventional investors as it offers monthly, quarterly, yearly returns. One important thing about fixed deposit is that its interest rates are quite stable so any significant change in the market does not affect your income.
Features of fixed deposit-
Returns are guaranteed
On the surplus funds, it offers an individual to earn high returns.
Against your deposits, you are eligible to apply for loans.
The tenure of fixed deposit ranges between 15 days, six months to 10 years.
Fixed deposit interest rates vary between 4%-8%.
You can make a partial or full withdrawal by paying the penalty over interest rates.
For senior citizens, a higher percentage of interest is offered which ranges from 0.25% to 1%.
Everyone should consider sticking to this investment tool because it helps you in achieving financial goals for the future. Fixed deposit offers flexibility and safety to your investment. It inculcates a good habit of saving for a longer duration. It is also recognised as a useful instrument for tax saving. So, hurry up and get your one fixed deposit account. By opening an FD account, you are ensuring that your safety is in your hand only. Working as an employee, you need to have some backup plans. Earning a monthly salary may not be sufficient as you have to look after the family also. That’s why you need to save something apart from salary and should start investing in fixed deposit.