The most important reason why FD is an investment option is because the principal invested in it is never compromised.
New Delhi: Corona is currently facing a dire economic situation both at the national level and at the individual level. Therefore, every step has to be taken carefully. The savings made in the past are working in this difficult time. There are many savings options available in today’s world; However, the most popular option is Fixed Deposit (FD).
As mentioned above, interest rates on all types of savings and investment schemes have come down due to the dire situation. His shot has not hit ‘FD’. FDs can be invested for a period of one to ten years. It can fetch interest rates ranging from five and a half to six and a half per cent depending on the period. Interest rates for senior citizens may be slightly higher.
The most important reason why the FD option is so popular is that the capital involved is never compromised. If you invest in stock market related options, the underlying amount can fluctuate as the market goes up and down. The risk of a reduction in the amount is not in the FD. Moreover, whatever the interest rate is, you will get a refund. So even though interest rates are relatively low, people find the FD option a safe option. FD can be broken ahead of time if absolutely necessary. There is a slight loss of interest, but the principal is not threatened.
But in any case, the choice of the bank or the institution in which the FD is to be made is not made with consideration, but there may be a time of remorse. That’s why it’s important to remember a few things when doing FD. Let’s learn a little bit about that.
- Credit rating agencies like CRISIL or ICRA give credit rating to financial institutions, banks. Of course, organizations with good ratings are good / reliable. Therefore, when making an FD or investing, you should only look at the credit rating of the organization concerned. Other information of the concerned organization, market place, worldly etc. should also be sought. When all these things are ensured, investing will save money and get a timely return.
- If you want to invest a large amount, do not invest all the money in one bank. FDs should be made in different banks and their duration should be different. That means you will continue to earn interest for a long time. The government has now also provided insurance facility for the security of the amount invested. In the past, deposits up to Rs 1 lakh were insured. Now he gets an investment of up to Rs five lakh.
- Invest only after comparing the FD interest rates of banks. Interest rates vary for different periods. Also, some banks offer higher interest rates of up to 0.5 per cent on FDs to senior citizens.
- There are some types of FDs. The interest earned on some FDs is increased to the original amount and this can be done at maturity till the end of the term. Some FDs have the facility to withdraw / deposit the interest in your bank for a certain period of time. If the amount of investment is large, this amount of interest can be used to cover your expenses. Our original capital remains the same.
- You can also take a loan on FD. In case of extreme emergency, the loan option on FD can be relied upon. You can get a loan up to 90% of your principal. The repayment period of this loan can be up to maturity of FD. Loan interest rates on FDs can range from 0.5 per cent to 2 per cent. This interest rate is lower than other loans.
- FD you can break even before maturity if anything is needed. There are different charges for this depending on the bank. These charges can range from 0.5 per cent to one per cent. Some banks allow FDs to break even without penalties; But there may be different conditions. The amount of the penalty depends on how long the FD is broken before maturity.
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