Fix Deposits

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What is Fix Deposits?

Fixed deposit is one of the safest investment options, which provides high interest rates, while offering the stability and safety of the investment amount. Banks provide flexibility in selecting an FD tenure which can vary from 7 days to 10 years. FD interest rates vary according to the tenure of the deposit, economy conditions, investment amount, age of investor and the policy of the concerned bank. Not only that, banks and financial institutions provide various additional features added to the normal fixed deposit like sweep in deposit facility, tax saver FD, loan against fixed deposit and much more.

So, fixed deposit is a financial instrument which provides high returns on the investment, greater flexibility and high stability and safety of investor’s hard earned money.

Why Choose Fixed Deposit?

Fixed deposit provides various features & benefits, which makes it one of the most popular investment options available in India. Below-mentioned are some of the reasons of why one should choose fixed deposit:

1. Guaranteed Returns on Investment –

Fixed deposit earn every investor fix returns on their investments. The fixed deposit interest rates applicable (at the time of investment) are what the bank commits to pay on their investments. This assures every investor of the safety of their investment and that there will be no risks attached to the investments made.

2. Flexible Deposit Tenure Options –

Fixed deposit comes with flexible tenure options which may range from 7 days to 10 years. Fixed Deposit interest rates also vary with different tenure options. However, tax-saver FDs are booked only for a fixed period of 5 years and 10 years.

3. Investment Amount –

The minimum and maximum fixed deposit investment amount can vary from one bank to another. However, some banks provide minimum fixed deposit amount as low as Rs.100 with no maximum deposit limit that can be invested in a fixed deposit. Tax saver FDs come with a maximum limit of Rs.1.5 lakh per annum. FD rates offered on fixed deposits above Rs. 1 crore may also vary than on deposits below Rs. 1 crore.

4. Higher Returns

Fixed deposit interest rates are higher than the returns on the savings account. FD interest rates vary from 3.5% to 9% per annum according to the bank, age of the investor and the tenure that one invests for.

5. Calculate FD Returns –

Any investor can check and calculate the returns on the fixed deposits easily using Fixed Deposit Calculator. The Fixed Deposit Calculator easily calculates the returns using Principal amount, FD interest rates and tenure.

6. Loan against Fixed Deposit –

Banks and Financial Institutions provide the facility to all its customers to avail loan against their fixed deposits. Interest rates on these loans are usually 1-2% higher than fixed deposit interest rates but less than most of the applicable interest rates on loans. Individuals who are need of an urgent inflow of cash can opt to avail loan against fixed deposit instead of withdrawing their fixed deposit before maturity.

7. Credit Card against Fixed Deposit –

Any individual holding a fixed deposit can avail a credit card secured against it. As it is a secured credit card, it would, therefore, not necessarily require a good credit history. These credit cards can also help in building credit history and improve credit score, provided the card holder use the card responsibly.

8. Premature or partial withdrawal –

Banks and financial institutions provide the facility of withdrawal of fixed deposit amount before maturity by levying a premature withdrawal penalty. FD interest rates offered on premature withdrawal is usually lower than the card rate & the rate offered at present.