Reasons why you should open a Fixed deposit Submitted

There are a lot of avenues when it comes to investing your hard earned money. Some avenues are linked to the market which provides uncertain returns. At the same time, there are fixed income avenues which give guaranteed returns. 

A fixed deposit account is one such fixed-income scheme which gives guaranteed returns. You can apply fixed deposit account with a bank or a financial institution if you have a lump sum amount to invest.
Reasons why you should open a Fixed deposit Submitted
While many of you understand the concept of fixed deposits, you are unsure about whether to choose fixed deposits or not. So, here are some reasons why you should open a fixed deposit account -

You Get Guaranteed Returns

The best benefit of fixed deposit schemes is that they give you guaranteed returns. The rate of return is fixed and remains the same over the term of your deposit. The maturity amount is also fixed and you know how much money you would get when your fixed deposit matures. Thus, fixed deposits are suitable for risk-averse investors who want guaranteed returns.
Fixed Deposits Are Safe

Contrary to shares and mutual fund investments, fixed deposits provide you the safety of capital. The amount you invest in the scheme never reduces and you are spared from market volatility and negative returns.

They Are Affordable 
Anyone can invest in a fixed deposit scheme as the minimum investment required is quite low and affordable. Many banks allow you to start investing in fixed deposits with as little as INR 1000. So, fixed deposits are affordable and suitable for all.

They Serve As Collaterals

Fixed deposits are counted as your asset which you can mortgage with a lender to avail a loan. Loan against securities accepts fixed deposits as viable securities against which you can avail a loan. Thus, fixed deposits work as collaterals and give you the facility of loan against their value.

They Give Tax Benefits

There are five years fixed deposits which, if you choose, give you tax benefits. The money invested in the scheme is allowed as a tax deduction under Section 80C up to INR 1.5 lakhs. Thus, you can reduce your tax liability by investing in 5-year fixed deposit schemes.

The Returns Are Attractive

Fixed deposit returns are not low. They are moderate and start at 3.50% per annum and go up to 8%. Moreover, senior citizens are allowed a higher fixed deposit rate on their deposits.
Fixed Deposits Have Flexible Tenures

Fixed deposits have tenures which start from as low as 7 days and goes up to 10 years. You can choose any term as per your investment horizon and choose a fixed deposit as per your liking.

These are the benefits which fixed deposits provide you with. You can, therefore, invest in these schemes and enjoy the benefits. Before choosing a deposit, however, you should compare. The interest rates vary across different financial institutions. You should, therefore, compare the different schemes and choose one which has the highest interest rate.

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