A fixed deposit is among the best investment options for guaranteed returns. They are often counted as one of the most reliable and safe investment options. Many people prefer FDs over saving accounts, due to the surety of better returns, owing to the higher bank FD rates offered; and the fact that most private and public banks offer FDs and that they can also be easily opened in a post office.
Apart from offering great and assured returns, fixed deposits are extremely flexible and allow you to make investments for terms as short as a week, a couple of months, or for up to 10 years. The interest on such deposits is payable at maturity, depending on the bank FD rates being offered and the term you choose – annually or monthly.
Fixed deposits are a great way to encourage savings and inculcate the habit of accumulating money for future use. It requires you to invest a specific amount in an account for a specific period of time, without making a withdrawal before the tenure ends. However, there is an option for premature withdrawal, which usually costs some loss of interest, but is still a better option over selling stocks or other solid investments.
Here are a few things you must know about bank FD rates before you head out to open an account:
- Bank FD rates vary, depending upon the tenure and the bank’s policies that might change from time to time.
- While all banks offer FD interest rates according to market liquidity and RBI guidelines, the rates for all banks may not be the same.
- Most banks offer special schemes on FDs, which typically include higher rates of returns for select maturities. Therefore, do check for offers from time to time.
- For high value deposits, typically over a crore, banks offer different interest rates on daily basis and the difference can be up to 0.5%.
Therefore, the primary advantage of investing in fixed deposits is that you receive clear returns. So, as an investor, you won’t have to go through sleepless nights or have a fear of losing your profits. For more information visit: https://www.policybazaar.com/fixed-deposit/
