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Are banks the only options for a fixed deposit?

By Finserv MARKETS - Aug 26,2019
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Are banks the only options for a fixed deposit

Introduction

Fixed deposits are the safest, long-term investment tools which help you save some money from their income. Many prefer it for wealth creation and saving taxes. It is eligible for tax deduction under 80C and also offer high interest rates as compared to savings accounts. You can open a FD account with almost all the Indian banks. The interest rates on fixed deposit schemes may shot up to 9% and is usually affected by the market trends.

But once you add money to your FD account the interest will remain the same throughout the tenure. Hence, it is okay to grow financial assets without getting burned by market volatility and any related risk. One cannot withdraw a fixed deposit before maturity but in case of an emergency, you can liquidate it for a lower interest rate.

Some financial institutions may offer additional services to fixed deposit holders, which include loans against FD certificates at competitive interest rates. Under certain economic conditions, banks may offer lesser interest rates. This interest rate may vary between 4 and 7.50% and the tenure of a fixed deposit can vary from 7, 15 or 45 days to 1.5 years and can be as high as 10 years. It has to be noted here that FD investments in banks are are safer than Post Office Schemes as they are covered by the Deposit Insurance and Credit Guarantee Corporation.

The main goal of an FD is to keep your money safe for a longer period while earning you steady interest.You need deposit the money only once. You will be getting an FD receipt after depositing the money. Keep this safe, since you must submit this to withdraw money or renew the account postmaturity. You can opt for tax-saving FD and invest up to Rs. 1.5 lakhs to save on income taxes. The income is taxable and the tax is deducted at source as per the Income Tax Act, 1961.

Open a fixed deposit account on Finserv MARKETS. All you need is to fill in your personal details along with your nominee’s, choose the amount to invest, tenure and the type of fixed deposit (cumulative or non-cumulative). With minimal documents required, the validation and verification process is also seamless and expeditious. To make it easier for you, it also provides you the option to keep track of your investment on your smartphone anytime, anywhere.

Who can invest in FDs?

An FD account can be opened with any bank in India if you are a resident individual, HUF, an NRI, in a firm, or a Charitable Trust. Fixed deposits are a good option for people with some extra lump sum amount that they do not need for the time being. In turn it ensures capital protection and a uniform flow of income. On the downside, the returns are not inflation-beating. If you do not want equity exposure and if you are somewhat risk-averse, FDs are for you.

You can also look into debt mutual funds that serve this purpose and give higher returns. However the only drawback is that the returns are subject to market risks.

Why invest in fixed deposits?

  1. An FD account is a safe place to park your money, where market risks cannot touch the investment or the interest.
  1. During emergencies, people rely on investments they can liquidate easily, that’s when fixed deposits come handy. However, you can avail secured loans against FDs (up to 90% of the amount) at lower interest.
  1. You get the same interest payout throughout your tenure, regardless of the market fluctuations. The interest sum gets credited annually/monthly/quarterly as per your requirements.
  1. Almost every bank offers a higher interest rate to senior citizens. This appeals to retirees greatly.
  1. You can invest in tax-saving FDs for five years to avail 80C tax deduction.
  1. You can request the bank to transfer the amount to a new FD account, where it will reap more dividends.

In order to open an FD account, by logging into your internet banking account. You can open by filling the online form from your own account. There is no need for separate KYC as banks normally have it covered. There is another option of offline submission of the form. All you need to do is you to visit a bank and collect an application form. Submit the duly filled form with an ID proof, residential proof and passport size photos. Once you deposit the amount, they will give you an FD receipt. You will need it to redeem or reinvest once it matures.

Conclusion

Investing in secure tools like fixed deposits should be on every adult’s financial planning agenda. Innovative products like Fixed Deposit available on Finserv MARKETS offers you a hassle-free process online with minimal documentation and lucrative interest rates. Fixed deposits available on Finserv MARKETS can fetch you a higher rate of interest every year, making it more appealing than a regular fixed deposit in a bank.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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