Fixed Deposit is probably the most well-known method of investing money. With the introduction of many diversified schemes of investment, many have lost their faith in the concept of Fixed Deposit. But even today, they are probably the best way to invest money for a long term period. If you ask why? Here are 5 reasons.
The Rate Of Interest Is Fixed
There may be inflation and deflation, changes in income tax rates and demonetisation, but fixed deposits depend on neither of the factors. The rate of interest is fixed and therefore the monetary returns remain same despite market rates. This is where the fixed deposit is advantageous over other schemes as the rest of the schemes have variable return rates which may fall in the scenario of an economic crisis.
Flexibility In Duration For Maturity
The duration of the fixed deposit amount to mature can be decided by the investing customer. The time span ranges from a week to two decades. Thus according to the comfort of the beneficiary, the fixed deposit account can be started.
Advantageous For Senior Citizens
For the senior citizens fixed deposits are the most beneficial option. This is because they get higher rates of interest as account holders. Also, they do not have to pay any taxes till their matured fixed deposit amount is in the lowest tax slab.
There Are Schemes For Saving Tax
When investing our money, we do not like to put all of it into the same investment scheme. Here Fixed Deposit provides you with the flexibility of investing in a different scheme under it. There are certain fixed deposits known as Tax Saving FD's with longer maturity period. In these accounts, a principle amount can be invested and locked for a duration of 5 years. These are the stringent kinds of saving accounts that will not let you debit any amount of money until maturity.
Fast Liquidity Of Monetary Assets
The liquidity of assets means the ability of a financial investment to be converted into cash. In the case of Fixed Deposit, this provision is given to the account holder. Thus during an emergency, the money can be withdrawn from the FD before maturity period. This kind of flexibility is important in an economy where many variations are taking place at once. Therefore, the value of fixed deposit stands even today.