Career starters, parents or senior citizens, no matter at what stage of a career you are fixed deposits are the most preferred option of many investors. FD investments are safer and flexible enough to let you manage your finances and help you fulfil your goals. Whether it is building a corpus for your child’s education or fulfilling your travel dreams, fixed deposit is your safest bet. They also help you invest your retirement sum at a lower risk than mutual fund investment.
With smart investment planning, FDs can help you build a financial corpus over time.
Why invest in FDs?
A fixed deposit is a safer means of investment and a better option for investors with low-risk appetite. Opening an FD account is easier, and you can start your investment with the minimum amount.
Here are the significant benefits of fixed deposit:
- Safety of investment and return-on-investment
- Higher interest rate than a savings account
- Flexible investment tenure
More interest advantage for the senior citizen savings account
How FDs help you build a financial corpus?
- Senior citizens get to enjoy interest on their FD investments monthly, quarterly, half-yearly or yearly basis.
- Most banks and financial institutes have an auto-renewal feature. That way, your interest received will be reinvested into your initial sum, and you can enjoy the power of compounding on your FD investments.
- Most of the retirees receive quite a large sum in the form of gratuity, PF, and arrears. At this stage, investing your hard-earned money into FD is better than going for high-risk mutual fund investment.
- Not only the retirees but even parents can enjoy the benefits of fixed deposits to achieve the crucial milestones goals such as child’s education, marriage or even use your returns in case of emergencies.
- This is another perk of FD investment. You can open more than one FD account for certain tenures to achieve your financial goals.
- Unlike other ways such as mutual fund investment, the return on investment in FD has no downswings. The interest rate offered at the start will remain constant until the maturity. So, the change of current market rate or economy conditions will not impact the rate of interest and thus your return-on-investment.
With smart planning, auto-renewal of FDs and investment over a longer tenure, you’ll be building your future financial corpus at low investment risk and less investment time and hassle.