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Top Reasons Why FD Should Be in Your Investment Portfolio

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When planning investments for long-term returns, you should keep several things in mind, one of the most important ones being that your principal and interest amount do not decrease at any point in time. 

Considering this point, one of the most secure investments for you is a fixed deposit that guarantees returns and is not dependent on the market, unlike other equity investments. 

Saving for the future should be a habit that is taught gradually and built over time for better returns. Fixed deposits prove to be the soundest and most reliable option in

Here is why a fixed deposit should be a part of every individual’s investment portfolio:

1. Reduces portfolio risk-

Fixed deposits help create wealth through asset allocation and bring stability to your investment portfolio. It assures minimum swing in your investment returns and a stress-free investment experience.

2. Security and assured returns-

Fixed deposits give guaranteed good returns in the FD interest rates. At any given point in time, you know exactly the amount of returns you would get on the maturity of your fixed deposit. This makes financial planning easy as you can invest any amount as per your savings, knowing how much and when you would be able to withdraw in the future. 

3. Good interest rate-

Fixed deposit rates are better than savings account interest rates; hence they give better yields in the long run. For senior citizens, the FD interest rates are always higher than other investors. 

4. Easy to invest-

Investing in fixed deposits is a cakewalk as it needs a simple form-filling and payment of the amount you want to invest in it at the branch. Alternatively, it can be done online as well, in a few simple steps. There is a multiple-deposit facility, where one can invest in more than one FDs at a time. 

5. Allows premature withdrawal-

Emergencies can hit at any point in time, and you might be in dire need of instant cash. At such times, investments in the fixed deposits can come as a rescue as they can be withdrawn even before their maturity date. Although you would be charged a penalty on it, you would at least have access to your money when you need it the most. 

6. Easy to monitor-

Fixed deposits do not fluctuate or depend on the market risks. Hence it is easy to maintain and monitor them. All you need to do is keep track of their maturity date, which can be done online on your smartphones.

7. Nomination and sweep-in facility-

Fixed deposits offer a nomination facility, which can even be changed at any point in time. They even provide the sweep-in facility, which saves you from the embarrassment of insufficient funds or bouncing cheques. The money in the FD account can be used as and when required, and the funds can be transferred into other linked accounts in times of low balances. 

Final Take

Fixed deposits have been one of the most versatile and flexible investments for years as it helps develop a habit of dedicated savings. In addition, various facilities come with this mode of investment, which adds to the list of its benefits and why people consider it as one of the safest modes of building their savings and investment goals.

Fixed deposit (FD) is one of the safest investment options that allows people to earn relatively higher interest rates than regular savings accounts. Interest is paid on the amount deposited for a certain period of time. The interest rate depends on the type of creditor (public sector, private sector or small financial bank). Seniors are usually offered a higher price. In an emergency, you can easily liquidate your FD and receive the money.

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Sunday, 03th July 2022
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