Take a step towards financial independence by investing in FD
New Delhi : Most investment options are designed to meet our future needs, wants, and goals, but there are a few financial instruments that are necessary for every portfolio. And one such option is a Fixed Deposit. A fixed deposit is an investment product offered by banks that gives the FD account holders a chance to deposit a specific amount of money with the bank for a specified term or time period. After the completion of the term, the depositor gets the original principal amount along with additional returns. When investing in a fixed deposit, you can invest a sizable amount of money at a predetermined interest rate for a fixed period. The returns are not affected by changes in the economy or market fluctuations, making fixed deposits one of the most stable and secure investment options in the market.
Regardless of your risk appetite, investing in a fixed deposit can help you gain substantial financial security. Read on to know how opening an FD account can be your ticket to financial independence.
1. Guaranteed Returns
A fixed deposit is a preferred investment option for most individuals because of the assurance of guaranteed returns and the safety of deposit. As a fixed deposit is not linked to the market forces, it is unaffected by risks in the economy or market fluctuations. The interest rate offered when you invest in a fixed deposit remains the same throughout the time period of the investment. Thus the returns from a fixed deposit are guaranteed to help you know what you can expect from your investment, thus helping with financial planning. Therefore, a fixed deposit is one of the safest and assured ways to earn an income and gain financial independence.
2. Loan against FD
An emergency fund is one of the prerequisites for financial independence, so you can access your savings easily during times of need. For those who hold an FD account, most financiers offer a credit facility in the form of a loan or overdraft to the investor. With a nominal interest rate, you can choose to take a loan against FD that helps you meet your financial needs easily.
What’s more - you need not disturb your existing savings plan by liquidating your funds. You also do not need to look for a lender at the last minute, or settle for loans with a higher interest rate.
Hence, by taking a loan against fixed deposit, you will not have to pay a hefty interest charge or prematurely withdraw his/her Fixed Deposit.
3. Flexible interest payment options
Fixed Deposits offer a cumulative investment option that implies the interest will be reinvested and paid at the end of the tenor. Another option that an investor can choose is non-cumulative, wherein the interest will be paid off immediately on a monthly, quarterly, half-yearly, or an annual basis.
Hence, if you’re looking for regular income, you can opt for monthly or quarterly interest payouts. That way, you will never be short of a regular income. You can also grow your savings on a regular basis, and become financially independent.
4. Stable and low-risk investment option
Fixed deposit is one of the best investment options for investors with a lower risk appetite. Since your investment amount is unaffected by market fluctuations, you can expect assured returns and the highest safety of deposit. With the assurance of guaranteed returns, a fixed deposit helps in stabilizing your investment portfolio.
Unlike other investment options, investors can put in a limited amount of money and be assured of the returns. So, open an FD account today, if you’re looking to attain financial independence with stability.
It is relatively easy to liquidate a fixed deposit as there are no rigid restrictions imposed by banks over withdrawing a fixed deposit. One can easily break the fixed deposit when in urgent need of money during an emergency. Fixed deposits booked online can also be liquidated online via Net Banking. In the case of some financiers, the process may not necessarily be online. However, you can choose to liquidate your deposit by visiting the branch. If you liquidate your savings after the lock-in period, you may need to pay a small penalty for the early withdrawal of the fixed deposit. In such cases, you can always choose to take a loan against FD, instead of prematurely withdrawing from your FD account..
6. Additional rate benefits for senior Citizens
Senior citizens get the benefit of higher interest rates, which enables them to plan their retirement easily. The rate benefits on interest rates may range around 0.25% or more, depending on the financial situation you’ve chosen. Thus, by investing in a fixed deposit, investors who are senior citizens can choose a financially secure future that helps them generate periodic income through their savings.
Financial planning for the future is a very important part of any individual’s life. Similarly, gaining financial independence by investing in Fixed Deposits can go a long way in ensuring a comfortable life in the future. An FD account is an excellent way to build up your savings and earn assured returns.