Fixed deposit has been one of the most favorable methods of investment since a long time now. People of all ages are interested in FD as they want to secure their future. It’s common knowledge that people resort to fixed deposits because they see it as the safest form of investment. The returns of fixed deposits might not be as high as one would like but one has to consider the fact that it’s much safer and secure than other forms of investment.
Most of the working class doesn’t want to risk their hard earned money. Thus they like to play it safe with fixed deposits. Many investors are attracted in fixed deposit because not only will their money be safe and secured but increase too. FD offers a decent return on investment. FD is most suited for investors who don’t want to risk and are happy with moderate income generation. Nowadays investors always check their maturity amount using online FD calculator before investing money in FD schemes.
There are various banks and Non-Banking Financial Companies which are offering fixed deposits at a considerable rate of interest. There are three things you have to consider when we talk about fixed deposits – the amount to be deposited, the period for which it is to be deposited and the rate of interest that is to be charged on it.
What makes Fixed Deposit unique?
- Assurance: People seek safety and security in FD investment. They know that under FD their money will be safeguarded by the bank. Over time they will earn with the help of rate of interest. The return on investment is not much but then with the economic conditions to change over the period of few years, FD will become much more favorable.
- Fixed returns: The returnson fixed deposits are fixed. Thus you cannot be denied of it. You are bound to receive returns when your FD matures.
- Low Risk: In arguably one of the most attractive features of FD is a low risk. People of all age especially the ones above 30 are seeking investment in FD because the risk involved is pretty low.
- Tax saving: One can save up INR 1.5 lakhs by investing in tax saving FD. Under Section 80C one can avail this benefit.
Why must you invest in fixed deposit for a better return on investment in future?
The government has brought series of change in the last couple of years which has affected the overall market. It changed the repo rate by cutting it down in the last quarter of 2016. The rate of interest on FD had thus gone down. After demonetization, the rate of interest has gone down even further. This might have disheartened many of the investors to invest in fixed deposits, but one with a clear foresight would acknowledge that all the changes that have been introduced will bring about long-term changes. These changes will be investor friendly.
There are several things you must consider to make the most out of fixed deposit in the long run:
- Funding: The government has sanctioned about INR 5 lakh crore to the banking sector. This has not only brought about a reduction in the price of FMCG products but also led to a considerable stoppage of black money.
- Inflation reduction: The steps taken by the government have forced inflation to move downward. Thus 25-5 basis point rate cut is building up from Reserve Bank of India.
This is a favorable period to invest in FD because the inflation rate is going down. When the rate of inflation reaches lower than the rate of FD people will get high profits. Thus one should make the most out of the tight market and turn this situation in their favor.