Why Fixed Deposit is a Smart Way of Investment?
Every penny that a person earns honestly is through his extreme efforts and hard work. The most essential thought that appears in one's mind after he starts earning is to save that money is such a way so that he can utilize it in his bad times and at the time of his need. Also, another reason behind this intention of saving money amongst a lot of people is to have a secure and easy retired life.
There are various ways to save your very precious money, but the most opted way as surveyed is to go for Fixed Deposit. It is considered as a smart way of investment as it not only increases your money by adding an amount as interest to your principal sum but also secures your money for the term you choose. Fixed Deposits or FD's have a fixed minimum value for investing, but there is no maximum limit as such. The interest rates are generally determined on the length of the term for which the principal sum is fixed. Also, the returns come as a part of your maturity amount after completion of the term period you opt for. In case you wish to withdraw the amount fixed prematurely, there is an incurred penalty which lessens your returns in terms of added interest to your principal without affecting the actual sum. Most importantly, do not forget to put the name of someone trusted as the nominee for your fixed deposit. It will help in case of some emergency where your presence perhaps is no more possible.
How will you benefit from a Fixed Deposit than any other scheme?
- Fixed Deposits help you to cut through on your Tax rates for your yearly income and thus ensures tax saving.
- There are a lot of advantages in case you belong to the senior citizen category. In such cases, interest rates are generally higher than the reasonable rates.
- They also help you to secure your child's future in regards to his/her education, health, and marriage.
- FD does also help you in case you want to apply for some loan for any purpose.
- Some firms allow you the benefit of premature withdrawal from your tenured period.
How will you invest correctly in an FD?
It is better to split your overall amount into various schemes considering the market risk and the tenure term. This will ensure you towards achieving high rates of return on your fixed sum and also will provide liquidity. In the case of emergency situations, where you would perhaps need to opt for premature withdrawal, such divided investment would ensure that not the entire sum is affected by incurred penalties. Also, remember to choose your tenor carefully as this will help you in the long run.
Therefore, considering all these facts, you can easily give a thought towards investing in FD's to ensure good returns in a secure way for your hard-earned money.