Do you know why people store money in the bank than under their mattress or any other hiding place in their house? Well, there is a couple of good reason. One such reason is that the banks keep your money safe and secured in the event of theft, fraud, fire and natural disaster. Another reason is, banks pay interest to you for depositing money. Several bank facilities pay interest to you; one such service is a fixed deposit.
What is a fixed deposit account?
It is a depository account provided by financial institutions and banks who pay interest if the money remains until the fixed maturity date. Fixed deposits offer investors a higher rate of interests than any other savings account. It also provides other benefits which make it one of the most reliable investment tools. If you are investing for the first time, then fixed deposits are the best service to resort to. You can open a fixed deposit by either walking to your nearest bank branch or get it done through your net banking service. FDs develop savings habit within a person.
Apart from the benefits mentioned above, having a fixed deposit involves other advantages as well:
1) Guaranteed returns: Fixed deposits assure you returns. The gains are more than that of savings account. However, these returns vary as per the investment tenure. Ensure you do not break your fixed deposit in between. That might affect your profits.
2) Flexible tenure: Another significant advantage of having a fixed deposit, is flexible tenure. They come with n-number of tenure that ranges from 7 to 10 years. Again, this factor differs from bank to bank. Choose a mandate that meets your financial requirements and avoids falling into premature withdrawal trap.
3) Mode of interest payment: As you open a fixed deposit account in the bank, the lenders provide you with the options through which you can receive the interest. You choose to be paid annually, monthly or during maturity.
4) Emergency rescuer: An essential benefit of investing in fixed deposits is it helps you during emergencies. Several banks offer loan against a fixed deposit. You can use 90 per cent of FD amount as loan. Some banks also allow partial withdrawals.
5) Risk management: Mutual funds, loans, etc. provide high returns. At the same time, they are risky as well. It becomes essential to have a debt account in place. Fixed deposits handle these risks well as the returns are fixed.
6) Joint fixed deposits: Some are unaware of the concept of joint fixed deposit account. Customers can have an account with their spouse, parents or children. However, at the time of partial withdrawals, signatures of all FD holders would be required.
You can open a fixed deposit anytime and anywhere. The process is hassle-free. However, ensure to select the right tenure.
What is a fixed deposit account?
It is a depository account provided by financial institutions and banks who pay interest if the money remains until the fixed maturity date. Fixed deposits offer investors a higher rate of interests than any other savings account. It also provides other benefits which make it one of the most reliable investment tools. If you are investing for the first time, then fixed deposits are the best service to resort to. You can open a fixed deposit by either walking to your nearest bank branch or get it done through your net banking service. FDs develop savings habit within a person.
Apart from the benefits mentioned above, having a fixed deposit involves other advantages as well:
1) Guaranteed returns: Fixed deposits assure you returns. The gains are more than that of savings account. However, these returns vary as per the investment tenure. Ensure you do not break your fixed deposit in between. That might affect your profits.
2) Flexible tenure: Another significant advantage of having a fixed deposit, is flexible tenure. They come with n-number of tenure that ranges from 7 to 10 years. Again, this factor differs from bank to bank. Choose a mandate that meets your financial requirements and avoids falling into premature withdrawal trap.
3) Mode of interest payment: As you open a fixed deposit account in the bank, the lenders provide you with the options through which you can receive the interest. You choose to be paid annually, monthly or during maturity.
4) Emergency rescuer: An essential benefit of investing in fixed deposits is it helps you during emergencies. Several banks offer loan against a fixed deposit. You can use 90 per cent of FD amount as loan. Some banks also allow partial withdrawals.
5) Risk management: Mutual funds, loans, etc. provide high returns. At the same time, they are risky as well. It becomes essential to have a debt account in place. Fixed deposits handle these risks well as the returns are fixed.
6) Joint fixed deposits: Some are unaware of the concept of joint fixed deposit account. Customers can have an account with their spouse, parents or children. However, at the time of partial withdrawals, signatures of all FD holders would be required.
You can open a fixed deposit anytime and anywhere. The process is hassle-free. However, ensure to select the right tenure.
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