Securing your hard-earned money and property with correct measures has become a very important task, to uphold for each individual. The industrial banks and financial establishments, supply us with services like different types of accounts and deposits, where we can store our money in a safe and secure way. Fixed deposits are the most preferable method if you are looking to save some money without withdrawing it for a certain period of time.
You get a rate of interest on your money in a monthly or a yearly basis without having to do anything. The interest rates of current, recurring or savings accounts don’t stay constant but with fixed deposits, this isn’t the case.
Those who are smart, invest in fixed deposits!
A fixed deposit provides everyone with a better rate of interest compared to alternative modes of savings. A separate account need not be created. The interest rates here are fixed till a given a maturity. These funds can not be withdrawn before the date of maturity. However, they can be withdrawn, when you pay a penalty rate and serve an advance notice.
Fixed deposits are used to store liquid funds for a hard and fast length, for future use. In the retail market, they are considered as safe investments provided by banks and other reliable financial establishments.
We are not alien to the benefits of investing in such deposits. However, there are many factors to consider when thinking about investing in a fixed deposit like
• The quantity you want to save
• The interest paid by the bank
• The penalty clause
• And finally the length of maturity
The main difference between the various styles of fixed deposits is the rate of interest and risk involvement. Non-banking establishments provide a higher rate of interest than banks with high risk. This system has verified to be used when saving a lot of money. The increment of the money provided through these deposits is quite the opposite when compared with the other choices on the market.
Other perks of a fixed deposit:
Regular financial gain: These deposits earn fixed or constant rate of interests for the whole tenure that is mostly combined on a quarterly basis. Investment through this technique will give you a supply of financial gain regularly through interest rates. This is best for those planning their retirement.
Safe and secure: The regulated banks and other financial establishments provide security and safety to your money. It’s safe, secure with guaranteed returns.
Save on taxes: The directives of the taxation department in most countries have different types of these deposits eligible for deduction in tax. Therefore, they will save on tax and provide returns at the same time.
These investments are long-term and have proved to be extremely helpful for people or businesses that need lower liquidity of funds. It’s appropriate for people that want to store their money for an extended period of time. The unpredictable nature of the economic condition all over the world makes it really difficult to be sure of our finances all the time.
This is the main reason why we must think about investment long term as well as short-term too to always ensure that we are financially comfortable in all the stages of our life.