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How much of your portfolio should be in the form of FDs?

By Finserv MARKETS - Aug 27,2019
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How much of your portfolio should be in the form of FDs

From your colleague at the office to market gurus — everyone is recommending a take on how to better invest to maximize returns. The opinions around investments are many, but amid these, a particular kind of investment stands out: fixed deposits. They continue to be one of the most popular methods of investment because they protect your capital while assuring you fixed returns.

The returns that fixed deposit accounts offer are often much higher than other forms of investment tools that are also considered risk free, such as government bonds and treasury bills. Besides, FD accounts offer much flexibility when it comes to the investment required, to tenures and liquidity.

Why invest in fixed deposits?

Besides providing a higher rate of interest than a normal savings account, fixed deposits come with a host of other values. A person who holds an FD account in their investment portfolio will undoubtedly save money, as it requires them to hold a lump sum account for a certain period. This money accumulates interests, which is then returned to the investor with the main sum at the time of maturity.

How much of your portfolio should be in the form of FDs
Another great benefit of having an FD is that it offers tax benefits under Section 80C of the Income Tax Act of 1961. Even though the interest you earn on your FD accounts is taxable, you can manage to claim a maximum deduction of Rs 1,50,000 on the amount that you have invested in it.

Besides, fixed deposits are a form of risk-free investments since their value is not market-driven and the returns at maturity are assured. The liquidity of fixed deposit accounts is also a driving factor behind their popularity as these accounts can be converted into cash at any point in time.

An FD account offers a lot of flexibility when it comes to having a tenure period. The tenures for these accounts can go up to five years on Finserv MARKETS — you can invest in a tenure which matches best with your financial needs, such as the need of money for your child’s education.

On Finserv MARKETS, there are two types of FD investments — cumulative and non-cumulative. The former compounds interest (payable at maturity) quarterly or annually, while the latter pays out interest periodically, depending on the choice of the investor.

FDs in your portfolio

Now that we have looked at some of the benefits that fixed deposits offer, let us look at how much of it should be a good idea for your investment portfolio.

“How much you hold in which type of investment matters more than the actual names, stocks and funds you may have,” says Uma Shashikant, Chairperson, The Center for Investment Education and Learning to ET.

Asset allocation makes for a simple strategy through which you can allocate your money in a way where you can balance risk and returns. There are various options to pick from — debt, gold and cash, real estate, equity, and even fixed deposits for that matter. The best way to go about it is to consider various factors such as your earnings, your investment goals, and your appetite for risk.

If you are someone who cherishes safety in investments, then it is recommended that FDs make a large part of your portfolio since they are the best device to minimize risks. It is recommended that you let fixed deposits make at least 33 percent of your portfolio. That way, a part of your investment can be secure, away from the volatility of the market. It is also recommended that you keep your emergency funds in a fixed deposit account as they can be accessed quite easily.


Fixed deposits on Finserv MARKETS offer high-interest rates up to 8.95 percent which lets you take control of your investment portfolio by merging attractive returns with high stability. Since these deposits are ICRA MAAA and CRISIL FAAA certified, your money surely falls in safe hands.

FDs also come with a fast online process in three simple steps: filling in your details and choosing an investment plan, uploading the documents that are required, and finally depositing the required amount. Post that you can track your FD returns online anytime, anywhere.

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") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522