Top 6 Benefits of Fixed Deposit (FD) Account

Fixed Deposit Account has been India’s most popular investment tool for generations. Indian investors appreciate FD investments as they offer the optimum Capital safety and produce reasonable returns. The best part about FD accounts is that you enjoy the Flexibility to select the investment tenure as per your choice. It deserves a special mention that FDs offer ample liquidity to address your difficult cash needs during the lock-in period. As such, there is every reason for Indian investors, especially those with the lowest investment risk-bearing capacities, to prefer this investment option over other alternatives. Here are the top reasons to invest in FDs. 

Minimum Investment risk and maximum capital safety 

The top reason to account beyond the massive demand of the Fixed Deposit Account is that it offers you the minimum capital safety. FDs feature the minimum investment risk. Most importantly, the Reserve Bank of India extends capital protection for FD accounts to 5 Lakhs. Thus, your hard-accumulated savings can never go for a toss. For this reason, you should include FDs in your investment portfolio, especially for your retirement savings. 

You can easily calculate the interest receivable instantly by using the online Fixed Deposit interest calculator. 

Investors retain the Flexibility to choose the investment tenure. 

Investors appreciate FDs because they can choose the investment tenure at their convenience. Usually, FD investment tenure can vary between a few days to a span of 10 years. Investors can consider reinvesting the corpus upon completion of the initial investment term. Thus, you can select the lock-in period based on your financial goals. For example, if you are saving for your retired life or long-term financial goals, you should ideally opt for longer investment tenure. On the other hand, short-term investments are meant to support short-term goals. 

You can opt for a cumulative or non-cumulative payout. 

You can earn interest from your Fixed Deposit Account on a cumulative or Non-Cumulative basis. For the first case, you are not entitled to withdraw the interest midway between the investment tenure. In this case, you will get back the Capital and the total interest earned for the total lock-in period at one go on the maturity of the investment tenure. On the other hand, a non-cumulative payout entitles you to retrieve the interest at fixed intervals. Therefore, if you need a regular flow of income, you should always opt for the Non-Cumulative payout. A cumulative payout is suitable for investors who have an eye on the financial endowment. 

FDs offer you reasonable liquidity. 

Liquidity is a major area to consider when choosing an investment tool. It deserves a special mention that FDs offer investors reasonable liquidity. You can consider withdrawing the fund partially or completely before the maturity of the investment tenure to meet your exacting cash needs. Should you opt for such partial or complete withdrawal at a pre-mature stage, you will be required to pay the penalty. The rate in this regard gets determined, considering the length left for the maturity of the actual investment tenure. 

Fixed Deposits get you assured returns. 

Another major reason to invest in FDs is that it promises you assured return. The interest rate on FDs is determined based on the investment value and tenure. Usually, the higher the investment value and the tenure, you get entitled to the Highest FD interest rates. You can open an FD account with any bank and NBFC. The institution will communicate the interest rate when making the deposit. The assured return will help you mitigate the losses from the non-assured investment tools. Banks and NBFCs usually offer a higher interest rate to senior citizens. 

FDs can get you easy loans by pledging the Fixed Deposit Certificate. 

Banks and NBFC encourage applicants to apply for personal loans by pledging their Fixed Deposit Certificates. You can expect higher loan amounts and minimum interest rates on such loans. Most importantly, your loan is made available on simple terms and conditions. Thus, you can meet your exacting cash needs without liquidating your corpus. You can expect up to 90% of the fixed deposit value as cash loans.

Bajaj Fiserv welcomes you to apply for cash loans by pledging your Fixed Deposit Certificate. You can expect the most competitive interest rate and the fastest disbursal of your loan. 

Fixed Deposit Accounts are your stepping-stone to achieving financial endowment and consolidation. It adds ample variation to your investment portfolio and helps you to cover the possible losses from high-risk investments. Thus, wise investors would always include Fixed Deposit Accounts in their investment portfolios. 

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