If you are thinking about investing in a fixed deposit, then you are already on your way to securing your financial future. This is not just a smart move, but also a move where you can find a lot of returns for you.
Investing through a fixed deposit scheme have become widely popular,
since they are one of the most stable methods of investing, and you are assured
of getting a return. Once you start looking into FDs, check the interest rate
that your bank is offering you and see how much you stand to gain at the end of
the tenure period.
Let us look at why fixed deposits are one of the best methods of
investment.
They are One of The Safest Methods of Investing
If you are thinking of investing in something like the stock market,
then you know that there's a considerable level of risk that you have to take
into factor. You could stand to gain a lot, or you could lose everything that
you sank in.
But that is not the case with fixed deposits. They are known to be one
of the safest methods of investing. You can choose FD investment schemes that
will always expect a return.
They are Flexible to Your Needs
By flexible, I mean that they are essentially tailored to have maturity
periods that are suited to your convenience. You can choose to lock in a sum of
money for as little or if you want. Keep in mind though, that you will not be
able to access the money during that period, since it is in the maturation
period. Keep this in mind when you are thinking of opening a FD account.
You can also tailor your periods so that you can qualify for fixed
deposit tax benefits, saving you from having to pay taxes on your investment.
They Can be Compounded if you do not Need your Money.
After the end of the maturity period, if you do not need the money from
the fixed deposit, you can reinvest it again and gain additional interest from
the total amount that you got. This compounded interest can add up to a lot of
gains over time, so if you are someone that can trust themselves to have a lot
of money tied up with the bank for an extended period, then this is definitely
something for you to consider.
Relatively Safe for Senior Citizens
If you are a senior citizen, you are aware of how precious your money
is. You do not have a stable salary anymore, so you will have to think about
managing every little bit. For senior citizens, fixed deposits can be a good
way to get some extra cash through the money they already have. This means that
you will not have to spend out of your life savings to ensure that you can get
through the remainder of the month.
You will also find that banks will offer senior citizens a higher
interest rate on FD than regular customers, so you can take advantage of that
as well.
You Can Save on Taxes
While in other methods of investments, you can and will be regularly
taxed, fixed deposits are only taxable once they break the exemption limit.
This means, if you can plan your deposits properly, tax saving methods can be more
beneficial for you, keeping money in your hands without having to pay taxes
unnecessarily.
They are Easy.
Other investment routes can be difficult since you'll have to do days of
research and walk-through complicated procedures to get started. That is not
the case with fixed deposits. They are relatively easy to open and easier still
to maintain.
They Can be a Regular Source of Income
If you have several fixed deposits in several banks, they can also be a
sizable source of income for you, meaning that you can put your other money
into other investments, keeping your finances secure.
This means that you will not have to live from paycheck to pay check.
Fixed deposits have been around for a long time, and there is a reason
for that. If you're looking to start investing in these, then you should check
out the Fixed Deposit interest rate that
your bank offers and see if there's anyone else that can compete.
Arwind Sharma is a financial advisor with an experience of more than 7
years. He has worked for topmost financial firms in India and has been a
visiting faculty at many reputed institutes in India. Currently based in
Gurgaon, Arwind Sharma is a name to reckon with when it comes to financial
management for big brands. A post-graduate in business economics, he is an alumnus
of Princeton University, USA. During his free time, Arwind teaches children
from marginalised sections of society and work on his blog.
Article Source: Sharma_Ramesh
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