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if you Want to invest your hard earned money in a place where the risk is negligible and also you get a fixed return. In such a situation, FD ie Fixed Deposit can be a better option for you. FD is also known as term deposit. It also offers higher returns than other risk-free products like savings accounts and government bonds. Investing in FDs is generally free from market risk and provides assured returns on maturity or at regular intervals.
Getting up to 8 percent interest
After the increase in repo rate by RBI, most of the banks in the country are giving better interest on different FDs. Many banks are paying interest up to 8% per annum on FDs of 3 to 5 years. Taking advantage of this opportunity, you can easily get handsome returns. Fixed Deposit ie FD is one of the most popular investment products in the country for all age groups. There are some special advantages behind the popularity of FD. Let us know the 5 advantages of FD-
1. Fix & Rix Free Returns
FD remains free from the ups and downs of the market. That is, any kind of movement in the market does not have any effect on the returns of FD. Therefore, it makes it a stable investment option for investors. Another important thing is that the interest on FD is already fixed. That is, the investor knows that how much fixed income he/she will get at a fixed interval.
2. Liquidity facility
FD is one of the most liquid investments and money can be withdrawn from it whenever required. That is, if money is needed in an emergency, the investor can withdraw his/her FD even before its maturity. However, for that he/she has to pay a certain charge. Most banks charge pre-mature withdrawal charges ranging from 0.50% to 1.0%. The pre-maturity withdrawal charges of banks and NBFCs depend on the tenure.
3. Loan facility
FD is such an investment option on which you can also take a loan. Most of the financial institutions offer loans up to 90% of the FD amount to the customers in need without breaking the FD. The interest rates for this loan are very moderate. As per the terms and conditions of SBI’s loan against FD facility, there is no processing fee to be paid for availing loan against FD. There is also no prepayment penalty of any kind.
4. Minimum investment and more flexibility
FD is one of the most flexible product i.e. there is freedom to choose the tenure and amount yourself. That is, investment in FD can be made for a period ranging from 7 days to 10 years.
5. Good Returns
Talking about all the risk free investment options, usually FD is the best return yielding product. This is a good option for people who want to invest without any risk.
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