Here’s How Having a Fixed Deposit Account is Your Best Investment Decision Ever
If you have ever thought about saving money, you must have definitely come across few safe ideas where you can start from. Among the many options already available to an investor, stocks and mutual funds sound technical and might involve some risks.
Fixed Deposit interest rates are fairly steady and you can be sure of receiving income at the end of the maturity period.
Here are a few Fixed Deposit investment advantages that you can read and plan to invest your money according for best and assured returns.
- Assured Returns on Your Investments
One of the advantages of investing in an FD account is that you are assured of guaranteed returns at the end of your tenure. It also gives you a flexibility of time period for investment as the deposit period can range anywhere from one month to few years.
Unlike other investment measures like stocks or mutual funds, Fixed Deposits interest rates are not affected by fluctuating market conditions.
As an investor, you can breathe easy once you have saved your money in a Fixed Deposit account, since you are guaranteed returns at the end of the maturity period of your deposit.
- Save on Taxable Amount
According to the provisions of the Income Tax Act, 1962, if you have a Fixed Deposit investment for a period of five years, you get an exemption from tax deduction for up to the extent of Rs.1,50,000.
Therefore, investing in an FD not only gets you higher returns on your investment but also makes you eligible to be exempted from paying tax.
- Promote Your Saving Habit
Having a Fixed Deposit account means that your money remains with the financial institution for a certain period of time.
Though the account offers sufficient flexibility for you to withdraw at any given point of time, a small penalty is levied for premature withdrawal. This means that you can put in your money and use it only for important expenditures rather than using them for frivolous spending.
- Split the Amount With Different Banks: To extract the most value from Fixed Deposit investment advantages, you can spread out the money with different banks, which would ensure that you do not end up withdrawing all your money at one go from your Fixed Deposit account.
As someone who is new to saving habit and has no idea of how to avoid temptation of premature withdrawals, investing in an FD could break the bad habit for you. The basic tenet of a Fixed Deposit account is that you deposit your money for a certain term and leave it in the bank to collect interest, and receive it all at the end of the tenure that you have decided in the first place.
The Investment Option To Go For Today!
FDs are considered one of the safest investment options, especially if you are new to savings. Fixed Deposit interest rates are determined by the amount you are depositing and for how long your funds would remain locked in with the bank. This is actually quite beneficial, since there is a penalty levied on premature withdrawal, which guarantees that you receive not only your investment back, but rightfully earned interest too.
If you keep the above points in mind, you will be able to ensure that your money remains safe and acquires interest over a period of time. As a new investor, having a Fixed Deposit scheme would be one of the best options to exercise for getting assured returns on your income.