The best investment instrument offered by banks is Fixed Deposit. It helps people to save money. In FD, you can invest an extensive amount of money over a particular period of time at a high interest rate. Fixed Deposits can offered for a period ranging from 7 days to 10 years. That’s why FD is also known as a term deposit. If you want to withdraw the money, you will receive your amount on a periodic basis. It is not allowed to take the money before the end period, and if you want, you must pay the penalty. Here are some of the five features of fixed Deposits.
- Guaranteed Returns:
A Fixed deposit provides guaranteed returns. The interest rate on money deposited in an FD is fixed at the time of account creation. This means that you are aware of the interest rate while receiving the money over a period of time. You will get the same amount at the time of opening an FD. Because they are not dependent on the market, so the returns are guaranteed. This makes the fixed Deposit more secure than other investments.
- Rate of interest:
Investing money into a Fixed Deposit will earn a high return. Interest rates change depending on the term you choose. So check the interest rates with the bank. You can borrow up to 90% of your deposit amount at low interest rates. But it is a little higher than the FD rate. You can check your balance to verify your interest accumulation and total savings.
- Safe and Secure:
The safest deposit way is a term deposit. Therefore, the money loss is not possible here. It is easy to earn money. Because they are owned by the Reserve Bank of India, so they are risk-free. Insurance and credit guarantee cover fixed Deposits up to one lakh rupees. This indicates that the DICGC deposit insurance system can protect money up to 5 lakh.
- Growth in Savings:
The term chosen decides the return on investment. Because the longer term can increase the amount of investment. This provides term deposits with more money-making than regular savings. Bank branches offer 3% to 7% interest rates, which will help to increase the savings amount.
- Extend the period for maturity:
If you want to withdraw the money before the maturity period ends, you want to pay the penalty. So, there is a facility to roll over the term deposit at the end of the period. You have the option to renew the Deposit automatically. Instead of creating a new one, it can extend the maturity period.
To conclude:
Analyzing the benefits of fd account, you can see that they provide the best to people with low risk. If you like fixed income accounts, this is one of the best offers for you. This type of investment has limited future profit. However, banks offer a sweep-in feature. It allows customers to transfer extra money from a savings account to a fixed deposit until they need it. By using this feature, you can increase the profit from your FD account.
