Investment can be both advantageous as well as disadvantages depending on your choice of investment option. Volatile investment options are subject to changing interest rates. However, such options offer higher returns as compared to secure investment options. If you are averse to risk, secure investment options such as Fixed Deposit (FD) can be the best choice. You need to deposit a minimum amount to open an FD account for a fixed tenor. The interest rate is determined by the Reserve Bank of India for the banks and by individual financial providers for Non-Banking Financial Companies (NBFCs). These FD interest rates vary amongst the financial providers. You need to look for a provider that offers the highest interest rates and high flexibility in the investment option.
So, are fixed deposits the right opportunity to build wealth?
To know whether FDs are the right choice, you need to know the benefits of investing in the same. Below are a few benefits that you can avail when you choose to Invest in a Fixed Deposit:
- You can deposit a sum as low as Rs. 1000 to Rs. 2500 to open an FD
- You can flexibly choose the tenor until which you can earn interests on your investment
- You can select the FD type from cumulative and non-cumulative which in turn offers you flexibility in choosing the frequency of interest payouts
- You can apply for an FD online from anywhere around the globe, provided you are eligible as per the terms and conditions of the financial provider
- You can ladder your investment by opening multiple FDs at the same time with different tenors to maintain liquidity as well as to eliminate the risk of premature withdrawal
- You can deposit your money using NEFT, cheque, or other online payment modes
- You can calculate your FD returns using the online FD calculator provided on the website of the financial company
- You can renew your FD using the online portal and avail further increase in the interest rates offered
- In case of emergencies, you can take a loan against FD and partially utilize the accrued money by paying low interest rates for the same
- Some financial providers also offer high interest rates on FD for its existing customers and senior citizen customers such as Bajaj Finance
- You can make premature withdrawals by duly paying the penalties. However, it is not advised to make premature withdrawals so as to gain the complete benefit of the investment
What is the Right Time for Investing in an FD?
You can opt to invest in an FD soon after you meet the eligibility criteria mentioned in the terms and conditions of the financial provider. However, there are a few stages wherein FD can be of your great help; they are:
If you have long-term financial goals, investing in an FD would be the right choice. It is a secure option offering guaranteed returns of the invested amount along with high interest rates as compared to the standard savings account. Investing in market-linked options for a long-term can turn out to be a detrimental action. You may even lose all of your invested money in the process.
It is ideal to plan for your retirement as early as possible. Fixed Deposits can be the perfect choice to build your retirement corpus efficiently. You can assure and calculate the returns prior to the investment using the Online Fixed Deposit Interest Rate Calculator. A high-yielding FD offered by NBFCs such as Bajaj Finance can help you in growing your retirement corpus without any hassles. You can eliminate the risks of losing your invested money and open an FD with a quick application form. With minimal documentation and quick processing, you can quickly open an FD account from anywhere around the globe provided you meet the eligibility criteria for the same.
Balanced Investment Portfolio
In case you have already invested in high-risk investment options and wish to balance your investment portfolio, FD can be the best choice, Not only will your savings be secure, but also you can earn high interest rates with stability as compared to other secure investment options. When evaluating the right investment option, you need to browse through all the available options to earn high returns from the same. If you wish to gain high returns you can choose to diversify your portfolio by investing in different market-linked as well as secure investment options.