The best and most preferred investment option available to those reluctant to invest in risk instruments such as Equity and Mutual Funds is a Fixed Deposit. FDs allow you to control your financial risks and help achieve the goals you aspire to achieve at different stages of life. It may include securing the future of your child, their education and marriage, or as a protection against unforeseen expenses.
These deposits are also an intelligent way to create investments over a period. Besides FDs, investing in Recurring Deposit is also a good idea. There are some factors to consider before doing so:
Safety: FDs are secured investments that provide guaranteed returns. Credit rating agencies rate FDs provided by companies and HFCs so that investors can choose wisely. If you intend to invest in a corporate FD, always consider companies with high ratings such as \'AAA\' or similar.
Minimum Deposit: Many businesses have varying minimum and maximum deposit amounts. Checking with the company before investing is advisable.
Tenure: For a term of somewhere between a year to 10 years, most businesses provide deposits. As premature closing of the FD attracts, a penalty reducing the cumulative interest received until the deposit existed, choose your tenure carefully. For instance, if you need the funds after two years, ensure you invest for two years or less. Open an FD through the Banking app as well.
Interest rates: Depending on the applicant\'s option, corporations offer FD plans that pay interest cumulatively and non-cumulatively. On a monthly, quarterly, half-yearly or annually, customers seek recurring revenue for non-cumulative schemes. Cumulative schemes where the principal and accrued Fixed Deposit interest rates get charged on maturity are preferable by investors seeking savings and returns over a long period.
Nomination: If you are the only depositor, aexercise the nomination option in FD. The nominee demands the whole amount with FD interest rates upon the depositor\'s death.
Tax Deduction at source: The interest income from an FD is more than Rs. 5,000. In this case, the corporates deduct tax above that amount at the source.
Senior Citizen benefits: Corporate FDs are a good investment choice for senior citizens because, in their retirement years, they provide secure returns with an alternative to regular income. Generally, FD rates offered to senior citizens are 0.25% higher than the standard rates offered.
FDs are a stable and strategic investment for all these purposes, fulfilling the purpose of providing daily income and building a corpus with minimum to no risks. Use the FD calculator to find the exact amount to invest in the same.
