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What Are The 4 Advantages Of Using A FD Account?



fixed deposit

Fixed Deposit has been the most sought-after investment tool for Indian investors for generations. Especially investors investing for retrial savings or unwilling to shoulder excessive investment risk relies on FDs for their capacity to produce a meaningful return with zero-investment risk to the corpus. One of the key features of the Fixed Deposit scheme is that it produces assured returns, and you can select the investment tenure at your convenience. You can easily find the FD Interest rates for 2023 and calculate your return on the investment maturity with the online FD calculator. 

Advantages Of Using A FD Account

Fixed Deposit offers the optimum investment safety. 

The return on investment is the reward for the investor shouldering the investment risk. All investment tools come with their respective risk factors. The rate of return on the investment is directly proportional to the extent of the risk involved. In that regard, FDs are the most secure investment tool. 

As per the latest instruction from the RBI, all fixed deposit investment to Rupees 5 lakhs per account is 100% secured with the banks. It deserves a special mention that investors earn interest at a predetermined rate, and the return is assured. 

There can be no reason for the investor to incur any loss with their fixed deposit investment with the banks and NBFCs. You can consider the FD Interest Rates 2023 to calculate the return from your FD on completion of the investment tenure. Thus, FDs are the most suitable investment tools for investors if you are looking for lifetime savings or are unwilling to shoulder major investment risk. 

Fixed Deposit entitles the investor to choose the flexibility to decide the investment tenure. 

One key factor that accounts for the massive popularity of Fixed Deposit accounts is that you get to select the investment tenure at your convenience. The investment tenure can start with a minimum of 7 days to a maximum span of 10 years. You can select the investment tenure as per your convenience and financial goals. Upon the initial investment tenure, consider reinvesting the corpus. The interest rates on the fixed Deposit get decided based on the investment tenure you select. If you are saving for a lifetime or long-haul financial goal, select the longest tenure possible. 

Flexibility to select between cumulative and non-cumulative return 

While opening an FD account, you get to decide the return per your needs and financial plans. If you are looking for an endowment and don’t need the investment to produce cash rewards upfront, you should opt for the cumulative payout plan. Here, you cannot withdraw the interest midway between the investment tenure. You will receive the payout, including the principal and the interest earned on completion of the investment lock-in. 

On the other hand, if you want an immediate income from the investment, you should opt for the non-cumulative payout that will keep fetching the interest monthly or quarterly. If you are a retired individual and don’t have other sources of regular income, the non-cumulative payout can support you in meeting your daily expenses and calculate your return ny using FD calculator

You get to enjoy maximum cash liquidity.

FDs are highly sought-after as they offer the investor the maximum cash liquidity. You can come across a shortage of cash needs at any time. To match your cash needs, consider withdrawing the FD partly or completely at the shortest notice. However, you might need to pay the premature penalty for withdrawing money midway between the investment tenure. 

If you don’t want to dilute the investment and still have urgent cash needs, consider availing cash loans by pledging the fixed deposit certificate. Banks and NBFCs roll out cash loans on simple terms and conditions and at the most competitive interest rates on such secured loans. 

You may approach Bajaj Finserv to get instant cash loans at the lowest interest rates by pledging your fixed deposit certificate. 

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