In an unpredictable financial world, it is essential to prioritise the stability and security of your hard-earned money. One reliable and low-risk investment avenue banks and financial institutions offer is a fixed deposit (FD). By opting for a fixed deposit account, you can rest assured that your funds are shielded from market fluctuations, guaranteeing steady and assured growth.
Are you prepared to set off on a journey towards a financially secure future? Keep reading to discover six compelling reasons that prove an FD is an excellent choice to promote your financial well-being.
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1. Assured Returns
When contemplating investments, the return on investment (ROI) is a critical factor to consider. By opting for a fixed deposit, you can enjoy guaranteed returns. Unlike other investment options susceptible to market fluctuations, fixed deposit interest rates remain steady, ensuring that your deposit amount remains unaffected.
2. Flexible Tenure
The tenure choice for a fixed deposit account rests entirely with you. The minimum term for a fixed deposit varies depending on the bank or financial institution and can range from as little as seven days to as long as ten years. This flexibility empowers you to align your investment with your specific financial requirements.
3. Tax Benefits
Investing in a tax-saving FD with a 5-year lock-in period qualifies you for tax deductions under Section 80C of the Income Tax Act, 1961. This provision allows you to claim deductions of up to ₹1.5 lakhs from your taxable income each financial year, effectively reducing your tax liability. It is a convenient and reliable investment method to maximise your tax savings.
4. Allows Premature Withdrawal
Numerous banks and financial institutions provide a convenient option for early withdrawal on FDs before the specified maturity period. This feature enables you to access your funds in case of an emergency. However, when opting for premature withdrawal, you must pay a penalty to the bank according to the terms and conditions.
5. Loan Against Fixed Deposit
In times of financial need, fixed deposits serve as a valuable safety net. Numerous banks and financial institutions offer loans against fixed deposits, enabling you to access funds without breaking the deposit prematurely. The loan amount typically depends on the value of your fixed deposit, with some banks sanctioning loans up to 90% of the deposit amount. This feature proves crucial in handling unexpected emergencies, achieving short-term objectives, or capitalising on investment prospects without compromising your long-term savings.
6. Develops a Saving Habit
Highly versatile and flexible – fixed deposits help you develop a savings habit. Investing in fixed deposits necessitates keeping the funds locked for a predetermined duration to earn interest. This arrangement discourages impulsive spending and motivates you to manage your finances more effectively
By carefully considering the six compelling reasons outlined above, you can confidently opt for fixed deposits to achieve stability and financial growth. Whether aiming for short-term goals or securing long-term financial stability, a fixed deposit will be a valuable asset in your investment portfolio.
Secure your future with just a few clicks! Open a fixed deposit online and enjoy guaranteed returns.