Do you want to save money, about confused about the best and safest investment? Were you advised by people around to invest in a fixed deposit? So, if you are new to investing and still wondering if you should invest in a fixed deposit, then this article will guide you in understanding that a fixed deposit is a good investment option.
A fixed deposit is one of the safest and conventional methods of investing.
A fixed deposit (FD) offers assured returns at a predetermined interest rate and is viewed to be a lucrative to save and grow your money.
Let us understand more about a fixed deposit.
What is a Fixed Deposit?
An FD (Fixed Deposit) is one of the safest investment option. In a fixed deposit, the investor may choose to invest a fixed amount and the tenure for a fixed deposit generally varies from 7 days to 10 years. The minimum cap on investment for fixed deposit varies based on the bank/NBFCs/Micro Lending Agencies. Shriram Finance offers safe and profitable fixed deposit with interest rates of up to 8.40% per annum.
Here’s 6 Benefits of a Fixed Deposit:
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Interest Rates
When you invest money into a fixed deposit account, it generally yields you high interest rates than that of a regular savings account. One can enjoy high interest rates with the corpus and deposit as usually have high interest rates when compared to banks. You can also check the Shriram interest rate and calculate your maturity amount in minutes with Shriram fixed deposit calculator.
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Guaranteed Returns
One of the biggest reasons a fixed deposit is considered the best investment option. When you invest your money in a fixed deposit you will receive guaranteed returns as the interest rate does not go under any market fluctuations and will not have any impact on the deposit amount.
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Flexible Tenure Period
The tenure for a fixed deposit is flexible and of investor’s choice. The minimum term for a fixed deposit account depends on the bank or the NBFCs, which usually range from 7 to 10 years.
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Tax Benefits
When it comes to a tax-saving fixed deposit, it comes with a lock-in period of 5 years which can help you availing tax benefits. Under section 80c the Income Tax Act 1961, you can claim upto Rs.1.5 lakhs against your fixed deposit. The funds in a tax-saving fixed deposit cannot be withdrawn during the tenure of the deposit.
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Loan Against a Fixed Deposit
If you have an emergency, you will not have to break your fixed deposit prematurely. Although, you can always take a loan on your fixed deposit by applying for a loan and continue to earn interest on your deposit amount. Most banks and the NBFCs will allow you to take up to 90% of your fixed deposit as collateral for the loan.
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Hassle-Free FD Investment
With the help of a savings account, you can easily invest in a fixed deposit account by visiting a bank branch or applying it online. Once the fixed deposit matures, the amount can be either credited or renewed to your account.
Types of an FD
There are various kinds of fixed deposits that you should know before investing. They are:
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Standard Fixed Deposit
This is the most common type of a fixed deposit for investors. This type of fixed deposit is offered by both banks & companies. It is an investment option in which you can invest a fixed amount with any financial organization or bank. On maturity, you are eligible to receive the principal amount plus the interest earned from the investment.
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Corporate Fixed Deposit
The fixed deposit is offered only by companies or NBFCs. The interest rates provided by the companies are usually higher than banks. You can check their credibility based on the ratings from ICRA( Investment Information and Credit Rating), CARE( Credit Analysis and Research Limited), CRISIL ( Credit Rating Information Services of India Limited), etc. Shriram, the NBFC is rated “[ICRA]AA+( Account Aggregator) + (Stable)” by ICRA and Rated IND(Innovative Network Design) AA+/Stable” by India Ratings and Research(Indicates a high degree of safety).
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Senior Citizen
When it comes to senior citizens you can get many benefits on a fixed deposit, but you must be 60 years of age to be eligible for these facilities. Senior citizens get an interest rate of 0.50% per annum over regular interest rates. In case you yield for long-term fixed deposits, you will get great results for senior citizens with the benefit of extra interest.
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Cumulative Fixed Deposit
In a cumulative fixed deposit you need to invest your money for a particular period. The only difference is that if you do not withdraw your money prematurely, you will be able to earn high interest rates compared to standard fixed deposit.
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Non-Cumulative Fixed Deposit
In a cumulative fixed deposit will be the right choice for you if you have a limited income and have to depend on the interest from the investments for your monthly expenditure. You can also select the interest payout which can either be monthly or quarterly.
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Tax-Saving Fixed Deposit
In a tax exemption upto Rs. 1.5 lakh in a year. In this type of a fixed deposit has a lock-in period of 5 years which you cannot break the fixed deposit or make any premature withdrawal.
Conclusion:
A fixed deposit is one of the most accessible investment choice that will help you to apply for and help you secure. The benefit of a fixed deposit which is provided is guaranteed returns. It contains flexible tenure options depending upon your requirements. You can use the Shriram fixed deposit calculator to calculate the interest payout you can get on a fixed deposit of your choice.
Key Highlights:
- A fixed deposit is considered as the safest investment option
- Flexible tenure, it will helps you to achieve your financial goals efficiently.
- Shriram’s credit and safety ratings “AA+ (Stable) by ICRA and IND AA+/Stable by India Ratings and Research”.
- Invest your FD safely with Shriram and get best guaranteed returns.