It is vital to invest your idle money in suitable financial instruments to create a fortune and secure your monetary stability. A fixed deposit investment can be helpful if you are looking to earn respectable returns without taking any high risks. Read on to learn more.
Fixed deposit (FD) and its importance
Like most investment avenues, FD allows you to put a lump sum in the account, which provides you with returns over time. You can select the investment tenure, and the interest rate remains fixed over that period. In FD, the rate of interest is much higher compared to a savings account. When the investment period is over, you can reinvest in the fund or withdraw your money. FDs offer assured returns on investment at little to no risk. This feature makes it a must-have investment product in your portfolio.
Scenario of FD in 2021
It is understandable if you are not confident about investing right now, considering the market’s volatile condition. However, fixed deposits have always been a popular investment choice during market instability. With an FD, you can securely invest the money and let it grow with time. As it offers fixed interest rates, the chances of loss are practically non-existent.
If you wish to earn a high-interest rate on your investment, you can opt to invest in FDs offered by financial institutions. For instance, Mahindra Finance is currently offering an interest rate of 7.34% for FDs with a five-year tenure. Here, senior citizens will get 0.25% extra interest.
Advantages of investing in FD
Here is a list of Fixed Deposit benefits that make FD an excellent choice for you.
- It encourages investments
While investing is an essential part of financial planning, many people in India are still not comfortable with the risk factor. However, as FDs do not have any risk, they can help you build a habit of investing.
- You can take a loan against it
FDs allow you to avail of a loan against your account. This feature comes in handy during emergencies. For loans against FD, the payable interest rates are lower compared to traditional loans.
- It provides flexibility
FDs offer you the convenience to choose between cumulative and non-cumulative payouts. The cumulative return is where the interest accumulates, and you get the return on maturity. In case of a non-cumulative return, you get the payments monthly, quarterly, half-yearly, or annually as per your preference.
It is necessary to pick the appropriate financial institution to ensure that you earn decent returns on investment. With Mahindra Finance FD rates, your future will be in safe hands. Visit the company’s website and open an FD now!