Fixed Deposit: In recent times, everyone is in a desire to earn more money in a short time. Some equity market, someone is investing money in mutual funds and some are doing futures and options. Amidst all these investment measures, the relevance of fixed deposits (FD) traditionally investment methods has reduced significantly. However, FD has been the easiest option for Indian investors. By the way, whether you are a Conservative Investor or a general savior, it is very important for everyone to include FD in your investment as it balances investment. These are the 5 reasons that tell why the fixed deposit should be part of your investment.
Security of capital
The biggest benefit of fixed deposits is your capital protection. The price of stock or mutual funds is up and down according to the market mood, while FDs provide fixed returns and security for your capital. FD is a great option for traditional investors, pensioners or any person who wants to protect some part of their capital. Explain that the amount of up to Rs 5 lakh per bank per account is covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which provides FD additional protection.
Fix and safe return
When you keep a fixed deposit, you are guaranteed the amount received within a certain period. Interest rates are determined at the time of investment, which protect you from market fluctuations. By estimating the returns on your capital, you can already be prepared for the future cost plan by incorporating FD in your investment. Whether it is to raise money for the education of the child, to save for leave, FD is a safe investment plan for all.
Make investment planning according to your need
Fixed deposits have many types of investment plans. FD has plans ranging from a few days to several years. With this, you can plan your investment according to your needs. However, you may have to pay a fine on premature withdrawal. However, most banks on FD provide partial withdrawal or overdraft facility, which provides you with liquidity in an emergency without affecting your entire investment.
FD is the best option for diversify
Diversifying their investment for aggressive investors provides additional protection. FDs reduce the balance of risky investments such as equity or realty. During recession markets provide FD fix returns, which you can use to protect the loss of somewhere else in your portfolio.
Along with saving tax, loan is also useful in collateral
Some fixed deposits such as a five-year lock-in-period tax-seed FD, are eligible for deduction under Section 80C (maximum ₹ 1.5 lakh per year) of the Income Tax Act. Although interest from interest will be taxable, such FDs can remain part of your tax benefit strategy. Along with this, FD can be pledged as collateral for personal loan or overdraft facility. This provides the facility of lending at a low interest rate if needed.