Ad Banner
Advertisement by Open Privilege

The power of fixed deposits: Your path to financial peace

Image Credits: UnsplashImage Credits: Unsplash
  • Fixed deposits offer guaranteed returns, making them a safe investment choice.
  • They provide flexibility in terms of tenure, catering to both short-term and long-term financial goals.
  • Fixed deposits can be used as collateral for loans, adding financial flexibility.

Fixed deposits (FDs) have long been a popular choice for individuals seeking a secure and reliable investment option. Unlike the volatility of stocks or mutual funds, fixed deposits offer a stable and predictable return, making them an attractive choice for risk-averse investors. In this article, we will explore the various benefits of choosing a fixed deposit.

A fixed deposit is a financial instrument offered by banks and financial institutions that allows individuals to deposit a lump sum of money for a predetermined period at a fixed interest rate. Upon maturity, the depositor receives the principal amount along with the accrued interest. The interest rates for fixed deposits are typically higher than those for regular savings accounts, providing an incentive for investors to lock in their funds for a longer duration.

Benefits of Fixed Deposits

1. Guaranteed Returns

One of the most compelling reasons to invest in a fixed deposit is the guarantee of returns. Unlike equities or mutual funds, where returns are subject to market fluctuations, fixed deposits offer a fixed interest rate that remains unaffected by market conditions. Because they provide a guaranteed return, fixed deposits are the investment vehicle of choice for conservative investors who are looking for financial security.

2. Low Risk

Fixed deposits are considered one of the safest investment options available. The principal amount is protected, and the interest is guaranteed, making it an ideal choice for risk-averse individuals. A significant number of individuals favor fixed deposits (FDs) over other investment opportunities since the risk of losing your principal amount is quite low.

3. Flexibility in Tenure

Fixed deposits offer flexibility in terms of tenure, ranging from a few months to several years. This allows investors to choose a duration that aligns with their financial goals and liquidity needs. Due to the fact that the duration can be chosen in a flexible manner, fixed deposits are a versatile investment strategy that can accommodate both short-term and long-term financial plans.

4. Tax Benefits

In some countries, fixed deposits offer tax benefits under specific sections of the Income Tax Act. For instance, in India, investments in tax-saving fixed deposits with a tenure of five years or more are eligible for tax deductions under Section 80C. Tax-saving fixed deposits not only guarantee returns but also assist in lowering the amount of income that is subject to taxation.

5. Loan Against FD

Fixed deposits can also serve as collateral for loans. Many banks offer the option to take a loan against your fixed deposit, providing liquidity without breaking the deposit. This feature is particularly beneficial in times of financial emergencies. The fact that you are able to obtain a loan against your fixed deposit provides you with an additional layer of financial flexibility, which makes it an outstanding asset to include in your investment portfolio.

Fixed deposits remain a cornerstone of financial planning for many individuals, offering a blend of safety, assured returns, and flexibility. The stability and predictability of fixed deposits make them an indispensable part of a balanced investment portfolio. Whether you're saving for a short-term goal or planning for long-term financial security, fixed deposits provide a reliable and straightforward investment avenue.


Ad Banner
Advertisement by Open Privilege

Read More

Finance Singapore
Image Credits: Unsplash
FinanceApril 2, 2025 at 10:00:00 AM

FBM KLCI opens higher post-holiday amid cautious market sentiment

[MALAYSIA] The FBM KLCI got off to a good start in early trade on Wednesday, as trading resumed after the two-day Hari Raya...

Economy Singapore
Image Credits: Unsplash
EconomyApril 2, 2025 at 9:30:00 AM

China's tariff-dodging strategy in Mexico faces collapse

[WORLD] In recent years, Chinese manufacturers have increasingly relied on Mexico as a strategic base to avoid US tariffs. By moving production to...

Tech Singapore
Image Credits: Unsplash
TechApril 2, 2025 at 9:00:00 AM

Trump faces deadline to decide TikTok's U.S. future

[UNITED STATES] President Donald Trump is due to review a final plan for the sale of TikTok's US operations today, just days before...

Economy Singapore
Image Credits: Unsplash
EconomyApril 2, 2025 at 6:30:00 AM

Oil prices dip as trade war fears and supply worries loom

[WORLD] Oil prices fell on Tuesday as traders braced for reciprocal tariffs that US President Donald Trump is expected to announce on Wednesday,...

Economy Singapore
Image Credits: Unsplash
EconomyApril 2, 2025 at 6:30:00 AM

Wall Street climbs amid tariff uncertainty as tech stocks rebound

[UNITED STATES] The S&P 500 and Nasdaq Composite both closed higher on Tuesday, following a volatile day on Wall Street driven by market...

Economy Singapore
Image Credits: Unsplash
EconomyApril 1, 2025 at 7:30:00 PM

Singapore faces economic slowdown amid US tariff impact

[SINGAPORE] Singapore's GDP is expected to decelerate to between 1% and 3% in 2025, down from a strong 4.4% expansion in 2024. This...

Careers Singapore
Image Credits: Unsplash
CareersApril 1, 2025 at 10:00:00 AM

Why job applications get rejected beyond qualifications

[WORLD] Applying for jobs can be an exciting yet stressful experience. After tailoring your resume, writing a compelling cover letter, and impressing during...

Leadership Singapore
Image Credits: Unsplash
LeadershipApril 1, 2025 at 10:00:00 AM

Leveraging thought leadership to escape overwork

[WORLD] Many individuals find themselves trapped in the cycle of overwork. Constantly juggling responsibilities, meeting deadlines, and responding to emails, many professionals reach...

Economy Singapore
Image Credits: Unsplash
EconomyApril 1, 2025 at 3:00:00 AM

Trump's tariffs and the role of VAT in trade policy

[UNITED STATES] In the evolving landscape of international trade, the prospect of reciprocal tariffs under the leadership of former President Donald Trump has...

Culture Singapore
Image Credits: Unsplash
CultureApril 1, 2025 at 3:00:00 AM

Reviving workplace culture for long-term success

[WORLD] Many companies are struggling to maintain a strong, cohesive workplace culture. While employees may be physically present in the office or virtually...

Tax Singapore
Image Credits: Unsplash
TaxApril 1, 2025 at 2:00:00 AM

Why military families shouldn't skip tax-free retirement account

[UNITED STATES] Military families face unique financial challenges and opportunities, especially when it comes to planning for retirement. While many members of the...

Health & Wellness Singapore
Image Credits: Unsplash
Health & WellnessApril 1, 2025 at 2:00:00 AM

The impact of a tough job market on mental health

[WORLD] The job market and economy have long been central to societal well-being, but recent years have presented significant challenges. With rising unemployment...

Ad Banner
Advertisement by Open Privilege
Load More
Ad Banner
Advertisement by Open Privilege