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Can fixed deposits outperform equity markets?

By Finserv MARKETS - Aug 26,2019
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Can fixed deposits outperform equity markets

Fixed deposits have been acclaimed as the best investment plan for many years now by people across all age groups. They are the safest investment options no matter how old you are, or how long you want to invest for but their results are best seen as long term investment plans.

Investment instruments are of different kinds, and often show different results.

The investment instrument you choose will inherently depend upon your requirements such as whether you are saving up for a long term or short term goal, how soon you expect your returns to start coming in and other such criteria focusing around your reasons for investing.

Equity markets are among other investment options that are popular with people, as they involve investing in shares of companies in the stock market.

However, fixed deposits are widely acknowledged to be the best investment plan for several reasons. Different banks and agencies offer fixed deposits at different rates of interest. Investing in fixed deposits on Finserv MARKETS allows you to earn returns with competitive interest rates. You can start your investment with an interest rate of 8%, which can go up to 8.95%.

Read on below to learn about how fixed deposits outperform most kinds of investment instruments, including equity markets.

1. Low volatility:

While investing in equity stocks do result in higher returns than investing in fixed deposits, they are also exposed to a lot of volatility in the stock market. Returns from investing in these markets are often subjected to fluctuations owing to a host of economic and social market factors, both regional and global. This can lead to returns falling drastically. However, with fixed deposits, there are no such risks attached. The returns on fixed deposits remain more or less constant and there is no danger of returns falling in the middle of the term. With fixed deposits, certain sections of society such as senior citizens even get higher returns. Senior citizens can invest in fixed deposits on Finserv MARKETS and avail interest rates that are 0.35% over and above the regular interest rates of 8.40%.

2. Fixed deposits can be counted upon during emergencies:

At times, especially during family or other kinds of personal emergencies, there might be a cash crush. At such times, fixed deposits can be counted upon for bailing you out of a sticky situation. Availing a personal loan can be expensive, and returns from the equity market cannot really be counted upon to be around on a rainy day. However, with a fixed deposit, you enjoy a certain amount of liquidity since you can easily break it and withdraw your funds. Investing in a fixed deposit on Finserv MARKETS even affords you the privilege of accessing details of your investment online so you can keep track of your returns at any time.

3. Security of investment:

Fixed deposits are often considered the best investment plan because they are the most secure investment options, which make them a great long term investment plan. When you invest in fixed deposits, you can remain secure in the belief that you will receive the returns you have been promised over the term period. The government usually acts as a guarantor for fixed deposits, so even if the institution where you have invested goes bankrupt or has to shut shop for whatever reason; you will be able to get your money back. Credit rating agencies such as CRISIL rate fixed deposits on Finserv MARKETS with FAAA rating, which is the highest level of security. However, this is not a benefit that you can avail for other kinds of investment, such as equity shares. If you lose money while investing into equity shares, there is no guarantor and that money is lost to you forever.

These are just some of the reasons that fixed deposits are considered the best investment plans. In terms of long term investment plans, especially, fixed deposits are second to none since they can help you build up a significant corpus. Equity markets, while offering higher returns, are not very safe in terms of the returns.

Since they are dependent on a host of other factors including market forces, economic conditions, government decisions, political stability regionally and even globally; they are more prone to risks than fixed deposits could be. However, investing in equity markets could yield returns which are higher than those you would get from investing in fixed deposits.

Investing in fixed deposits through Finserv MARKETS makes you especially secure. The platform also increases your convenience, since you can fill in your details online, choose the plan and tenure that suits you best, upload the necessary documents and simply deposit the amount. The online processing ensures complete transparency, and allows you to keep an eye on your investment at all times.

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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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522