5 Benefits Of Investing In Fixed Deposits
Fixed or Term Deposits are popular investment options banks, and financial institutions offer
Fixed or Term Deposits are popular investment options banks, and financial institutions offer. They provide several benefits that make them attractive for investors seeking stability and consistent returns. However, many are unaware of such benefits. So, here is a list of the top advantages:
- Safety and security
The best part about investing in Fixed Deposit is its safety and security. Unlike other investment avenues that carry market-related risks, it provides promising returns of the principal amount. It is typically insured by Deposit Insurance schemes, which further safeguard your investment. This makes it ideal for risk-averse investors who prioritise capital preservation.
- Stable and predictable returns
A Term Deposit provides stable and predictable returns. Its interest rate remains fixed throughout the deposit tenure, giving clarity on the expected returns. Such predictability makes it easier for investors to plan their finances, especially for specific financial goals or during retirement. Moreover, market fluctuations do not influence the returns, making them immune to economic volatility.
- Liquidity options
While FDs are considered long-term investments, they also offer liquidity options to investors. Most banks allow premature withdrawals, subject to certain conditions and penalties. Additionally, you can apply for Loans against your FDs. You can access funds during emergencies without needing to break the deposit.
This liquidity feature offers flexibility and serves as a safety net. It ensures you have sufficient funds in your Bank Account when needed.
- Diverse tenure options
Whether you need short-term liquidity or want to park funds for an extended period, FDs offer flexibility in selecting the investment duration. Banks typically provide tenures ranging from a few months to several years.
The same is mentioned on their Banking app or website. Such information lets investors align their investments with specific financial milestones or future obligations.
- Easy application and accessibility
Banks have streamlined procedures for opening FD Accounts. Some even offer online applications. Their easy accessibility makes them convenient for people of different ages and income levels. Furthermore, the minimum investment amount for an FD is usually low, making it accessible to a range of investors.
Steps to apply for an FD online
Research and choose a bank: Research different banks that offer online FD services.
Visit the bank's website: Once you have selected a bank, visit their official website. Look for the section or tab related to FD or investments.
Create an account: If you do not have an existing account with the bank, you may need to create one online.
Fill in the details: Provide the required details for your FD.
Submit application: After reviewing the terms and conditions, submit your FD application.
Fund your FD: Once your application is submitted, you need to transfer the funds for the deposit.
