4 Significant Benefits of Having a Fixed Deposit Account

Your friends or family may have advised you to invest money in an FD account. But, what is FD? Fixed deposits are safe investment options if you are looking for a financial product that safeguards your capital and offers good returns as well. By investing in FDs, you can earn and save money at the same time. In simple terms, investing in a fixed deposit is one of the easiest ways of making your money work for you. Below mentioned are the few advantages of having a fixed deposit account –

1. Assured Returns: When you invest in a FD account, you get guaranteed returns. You earn interest on your deposited amount, although the interest rate depends upon the tenure you have chosen. In India, banks are offering up to 7 to 8% interest on fixed deposits at present.
2. Manage risks: This is yet another benefit of having a fixed deposit account. Financial instruments like gold, mutual funds, etc. may offer higher returns, but they are also very risky at the same time. Thus, to adjust this market risk, it is important for you to invest in debt instruments. Fixed deposits help you to manage such risks as the returns are fixed.
3. Easy withdrawal: The best thing about having a FD account is that you can withdraw the amount you have deposited in your FD account any time. For premature withdrawals, banks may charge you a small penalty.
4. It helps during emergency: A fixed deposit will help you a lot when you are in need of money. There are several banks that offer loans against fixed deposits. One can avail up to 90% of the fixed deposit amount as loan. Some banks allow partial withdrawal of fixed deposits as well.

Also, while applying for a FD investment, it is advisable to use a FD calculator. This calculator helps you to calculate the interest rate and to know the maturity amount you can get at the end of the tenure. Besides, for all those who are planning to open a fixed deposit account online in India, go for Axis Bank.