Whether you are a salaried employee or a self-employed professional, saving some amount of money is crucial. However, saving cash is easier said than done. Most of the time you end up splurging all the money. This could pose a threat in the future, especially during emergency situations. It is always a smart decision to save some expenses. Banks and other financial institutions offer you an array of investment options such as fixed deposits, mutual funds, market share, etc.
All the above options may sound good, but for beginners a fixed deposit account proves beneficial. How? You get to save your surplus amount securely, especially if you are looking for long-term investment.
What is a fixed deposit?
It is a type of term deposit that is considered to be the safest investment option available in the market. You can invest for 7 days or 10 years. A fixed deposit investment is deemed to be superior to a savings account purely because you earn higher interest that is credited on a monthly, quarterly or annual basis. However, you have to invest your entire amount in one go. If you wish to withdraw the cash before the tenure, banks and other financial institutions charge you a penalty.
How do you save money through fixed deposit account?
1) You can save money for an extended period without having the chance to withdraw
2) You receive guaranteed returns on your investment
3) If you incur any loss in your business, the fixed deposit investment acts as a cover. Banks offer you 70 to 90 per cent of the amount in the account as a loan
4) There is guaranteed cash flow as you earn interest at maturity or annually or on a monthly basis at discounted rates
5) You have the freedom to choose your mandate. It could be anywhere from 7 days to 10 years
6) You can make investments in various fixed deposit account based on your life events. They will mature on the tenure date you have chosen
7) You also receive a credit card against your fixed deposit. Banks and other financial institutions offer you 70 to 90 per cent of credit towards your fixed deposit amount
8) If you get loans and credit cards against your fixed deposit account, your interest rate remains unaffected
9) As per the Income Tax Act of 1961, you are eligible for a tax deduction if the fixed deposit investment amount is up to INR 1 lakh for 5 years under section 80 C
If you open a fixed deposit account, you will have no access to money for a specified period. Take a call on opening one keeping in mind your financial status and profile.
All the above options may sound good, but for beginners a fixed deposit account proves beneficial. How? You get to save your surplus amount securely, especially if you are looking for long-term investment.
What is a fixed deposit?
It is a type of term deposit that is considered to be the safest investment option available in the market. You can invest for 7 days or 10 years. A fixed deposit investment is deemed to be superior to a savings account purely because you earn higher interest that is credited on a monthly, quarterly or annual basis. However, you have to invest your entire amount in one go. If you wish to withdraw the cash before the tenure, banks and other financial institutions charge you a penalty.
How do you save money through fixed deposit account?
1) You can save money for an extended period without having the chance to withdraw
2) You receive guaranteed returns on your investment
3) If you incur any loss in your business, the fixed deposit investment acts as a cover. Banks offer you 70 to 90 per cent of the amount in the account as a loan
4) There is guaranteed cash flow as you earn interest at maturity or annually or on a monthly basis at discounted rates
5) You have the freedom to choose your mandate. It could be anywhere from 7 days to 10 years
6) You can make investments in various fixed deposit account based on your life events. They will mature on the tenure date you have chosen
7) You also receive a credit card against your fixed deposit. Banks and other financial institutions offer you 70 to 90 per cent of credit towards your fixed deposit amount
8) If you get loans and credit cards against your fixed deposit account, your interest rate remains unaffected
9) As per the Income Tax Act of 1961, you are eligible for a tax deduction if the fixed deposit investment amount is up to INR 1 lakh for 5 years under section 80 C
If you open a fixed deposit account, you will have no access to money for a specified period. Take a call on opening one keeping in mind your financial status and profile.
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