Investments are crucial for securing our future. They let us achieve our monetary objectiveson time. They are also helpful during financial emergencies. Owing to such benefits, banks offer specific investment facilities readily.
Of them, the most popular is a Fixed Deposit. It is a Term Deposit that lets you save money.It allows you to invest a sizeable amount at a fixed interest rate. This way, you receive a lumpsum at the end of your plan tenure. With time, this simple yet highly strategic scheme has become a unique option for most. Here are some reasons:
The best part about an FD is its attractive interest rates. Once you start depositing in FDs, you receive specific returns. Banks usually publish its structure on their website or brochures. This way, you know precisely how much interest rates you will gain. If you do get stuck, you have the facilities for assistance. For instance, most banking portals provide an FD calculatorto inform you of the estimates.
During a financial crisis, you may need to use your savings. But you do not face such a dilemma when you have an FD. It serves as a dependable financial instrument during a financial crisis. It offers a Loan that enables you to use up to 95% of the FD amount. The percentage, however, varies between banks.
Unlike other investment options, an FD comes with flexible terms. It is up to the deposit holder to decide how long they want to remain invested. They can also redeem the FD or extend it if need be. So, you need not worry about complying with inconvenient tenure terms.
An FD Account offers excellent liquidity to its holders. You can withdraw your deposits whenever you want. The process becomes simpler if you apply for an online FD. It barely takes time, thanks to online services.
Under 80C of the Income Tax Act, FDs are exempted from taxes. You can also claim a deduction despite the interest earned being tax-free. For example, you could claim a tax deduction of up to Rs. 1.5 lakh for the amount invested.
Most investment outlets involve market risks. However, an FD Account is not market-led. It is safe, reliable, and easy to follow through. Hence, it serves as an excellent option for risk-averse investors.
Following a discipline towards investments is imperative for strategic wealth-building. This allows you to track an investment habit. Its appealing interest rates urge you to sustain financial hygiene. It also encourages you to take accountability for money management. So, open an FD through the Banking app or other online mediums.