Fixed deposits (FD) have a long history of being one of the safest investment options available to Indian investors. They are considered to be a necessary part of any prudent investor’s financial portfolio. In the case of fixed deposit investments, it is important to note that you do not have to spend money to make money. In fact, with proper planning and the right financing corporation, you can go on saving money by reinvesting the money you saved in the first place. All it takes is a smart investment plan which offers a high interest rate, flexible tenors and easy functionality.

The advantages of fixed deposits begin with instantaneous online application approval and carry on all the way to the end with highest rates of return on the longest tenors. There are companies where customer satisfaction is accorded with the highest priority through hundreds of fixed deposit-dedicated branches across the country, completely online management of your account, and an accurate calculator that determines exactly how much you earn after your fixed deposit matures.

Financial Safety at Its Best

Most investors know the regular benefits of FD like higher rates of return and better liquidity options, but here’s a list of what makes a fixed deposit one of your safest preferences:

Guaranteed Return on Investment

Fixed deposits come with a fool-proof offer of receiving your funds back, with interest. No matter what the market condition is, you can always trust fixed deposits to come through for you.

Fixed Rate of Interest

From the moment you apply for fixed deposits until the maturity of your tenor, the interest rate on fixed deposits is never subject to any change. Even if the rates for other investments experience a downfall, your rate of return will not be affected at all.

Flexible Tenor

If you’re planning on saving money, it’s important to know what the future holds. That is the only way most investments pay out profitable returns. With fixed deposits, however, you do not have to worry even if your future in uncertain because they offer a highly flexible tenor period—from 12 months to 60 months.

Tax Savings

Under section 80C of the Income Tax Act formulated in 1961, fixed deposits up to 1 lakh are eligible for tax deductions if the maturity period is 5 years, but the interest earned is taxable.

Safety Net

If, due to unforeseen circumstances, you require a loan from any financial corporation, fixed deposits provide an easy option by letting you take a loan on FD. This means that the company will give you up to 70% to 90% credit as a loan on your own fixed deposit.

Cumulative or Non-cumulative Fixed Deposits

In the interest of financial safety and to keep a constant tab on your funds, some companies offer the option to choose between cumulative and non-cumulative fixed deposits. Although the rates of interest are slightly lower on non-cumulative fixed deposit, you can check through online fixed deposit calculator how rate of interest vary in cumulative and non cumulative fixed deposit. You have the advantage of obtaining a steady flow of cash throughout the tenor period.

Get Started On A Better CIBIL Score

Not only can you keep earning money on your fixed deposits even if you take out a loan on them, you can also improve your CIBIL score using the same loan since financing corporations need to have your credit information recorded with CIBIL to provide loans at a low cost.

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