The Fixed Deposit
For fixed deposit investments, investors have the option of going with a bank or a Non-Banking Financial Company (NBFC). Generally, people turn a blind eye towards better alternatives whenever they see the name of a popular nationalized or private sector bank associated with a financial product or service for that matter.
Given below are a few reasons why, in the upcoming months of 2018, investing in a fixed deposit of an NBFC should be on your to-do list:
Investing in a FD of an NBFC means you can earn interest of the range of 7.85%. This is for non-senior citizen investors who are younger than 60 years of age. For senior citizens investors who are beyond 60 years, this interest rate is increased to 8.10% per annum in case of FDs of NBFCs.
Similar to FDs of banks, your returns are guaranteed as there is no market factor in play here. So, even if the market goes from bullish to bearish or vice versa, your invested amount and interest income are always protected and assured.
NBFCs are Financially Stable
On doing your research, you will find lending institutions that are financially credible and stable. Stability ratings from credit rating agencies like ICRA and CRISIL will help in finding the best NBFCs to invest in.
Online Account Management
Certain NBFCs provide the feature of online account management for the fixed deposit. Keeping track of the invested amount has been thus made easy along with renewals and other features as well which have been made conveniently accessible.
There is no doubt about the fact that a fixed deposit from an NBFC can provide inflation resistant returns, especially in the long run, that's why should open company fd for getting high returns.
Women, whether working or homemakers, ideally have their own savings as contingency for testing times. These savings are generally stashed away in some safe corner at home or in a savings account. Either way, the savings remain stagnant and do not earn any return or interest. It is true for the savings account as well since the income is of the range of 4% per annum. This brings us to safe but lucrative investment options for women. The best investment and savings instrument for women is a fixed deposit.
Here are the top reasons why FD is the ideal investment for women working as well as non-working:
Security of Funds
Safety is the most important feature that women and men seek when it comes to investing their money. For most investors, irrespective of the gender, safety of the invested amount is of more importance than the returns itself. Fixed deposit for women is safe investment options as they provide assurance of both the amount invested and the returns.
Fixed deposits provide high and assured returns of the range of 8.20% depending on the age of the investor, her relationship with the bank or NBFC and the interest payout frequency opted for.
Coverage for Times of Need
FDs have a lock in period and if the investor faces any requirement of money in that time, she can avail a loan against the deposit.
So, instead of letting the savings lie idle, the same can be invested in a profitable FD scheme from a reputed bank or NBFC.
There is no shortcut on the road that leads to financial freedom. The only way to achieve financial freedom is by walking the miles on the coarse road. A simple investment strategy like investing in multiple FDs can liberate you financially faster than what you anticipated.
Besides investing in Fixed Deposits, there are a few more things you need to do:
Besides investing in Fixed Deposits, there are a few more things you need to do:
Invest in your Health: “Health investment is the best investment” whether you agree or not, it is true. Staying healthy gives you the mental and physical strength that an individual requires to indulge in activities through which they can gain monetary benefits. Plus, if you analyze the cost of living chart carefully, you’ll realize that medical expenses can put a hole in your pocket and deplete a large portion of your savings. So, it’s better to secure your health with a medical insurance when your health status is on the bright side.
Follow the Mantra: SAVE, SAVE, and SAVE: “Work like a slave today and live like a king tomorrow.” In order to achieve something as difficult as financial freedom, you have to make numerous sacrifices. Drop frequent travel plans, cut down your unnecessary expenses, live a very simple life to save as much as you can; and invest as little or as huge as possible in high-interest income schemes like FD. Invest whatever you save every month in fixed deposits (FDs) for a safe and profitable investment.
When it comes to saving for retirement, no matter how well your anticipation skills are, you can never predict the right amount you should save for a comfortable retirement. So, don’t leave anything to chance, do some market research, consult people who were in the same place a few decades ago, and make an exceptional retirement savings plan.
Plus, add these tried and tested traditional retirement savings key pointers to keep it perfect.
Planning for tomorrow begins today. If you want a comfortable retirement, you have to start planning today where you can invest surplus fund for getting high returns.
Fixed deposit is like the God father of investments. You know you can trust FD with your money without a doubt in your head: No risk on investment, moderate returns, and available for almost everyone ready to invest. But, even the Godfather of investments can’t help you get better returns if you aren’t investing in the right place. NBFCs offer higher interest rates on FD compared to banks, and that’s where you need to invest.
Apart from higher returns, there are few more influencing reasons to invest with NBFC’s, read them here:
Higher Interest Rate: It isn’t hidden any more than NBFCs offer higher interest on FD investment compared to public and commercial banks. Some NBFCs even offer interest rate up to 8% p.a. The interest rate can be higher if you are in senior citizen category.
Flexible Tenor: Tenor flexibility is one major reason why NBFCs are better than public sector banks for FD investments. As an investor, you get to choose the maturity period of your investment, which can be in between 11 months to 60 months.
Higher Security: Most of the NBFCs are regulated by National and International regulatory bodies like ICRA and CRISIL which categorize them as safe or unsafe for investment. Renowned NBFC's like Bajaj Finserv, Tata Capital have ICRA’s MAAA and CRISIL’s FAAA ratings, which signify the highest level of safety any NBFC can offer.
Better Customer Services: It is a well-known fact that commercial banks and financial institutions offer better customer services to keep their customers happy. Services like online application, doorstep customer services, and online account management make your life more convenient.
Read How Fixed Deposit the Best Investment Plan?
With half of the total investors opting for FD and the other half going with equity, there is a big confusion for every new investor. They always have this question: FD or equity investment, which is better? If you have the common question, here is the answer.
Return on investment: FDs offer interest gains up to 8% on investment, and the best part- the interest gain is 100 percent assured. Whereas investing in equities can get you up to 12% gains, but it’s more like gambling. If your luck fails to play by your side, you don’t even get back what you invested.
Tenor flexibility: Every investment requires time to ensure a decent growth and a decent profit. In case of equities, the investment period can test your patience, whereas, you can invest for a minimum of 60 days and earn interest gains.
Liquidity: Equities are known for higher liquidity which means you can withdraw money whenever you want. FDs are also good in terms of liquidity, but premature closure is charged with a penalty.
Market fluctuation effect: FDs remain unaffected by market fluctuations and you get the assured sum upon maturity, FD is the best option for start investing. On the other hand, with equities, you can lose a significant amount of money even with slightest market fluctuations.
When planning to make an investment with a lower risk factor and thinking about how to invest surplus fund , evaluate your options using these three criteria:
Fixed Deposits (FD): FDs (Fixed Deposits) are the most popular investment option in India. Why? It is easier to avail, has fixed interest rate, and an assured maturity sum which remains unaffected by market fluctuations.
The interest rate may differ depending on the lender. NBFCs offer a higher interest rate as compared to Banks.
A stellar portfolio is one which is diverse, balanced, and profitable. For earning individuals, saving and investing both are vital to ensure that their finances are always in the pink of health. Saving is simpler than investing as there are not too many factors to consider here, but in case of investing, things can get a little challenging when the investor is not seasoned and is ignorant. To make things simpler and better for all investors who need a slight nudge in the right direction, given below are a few smart moves that will help them build the best investment portfolio:
Mutual Fund Investments
Mutual funds are market dependent investment options that provide significant returns when the money is placed in the right funds. The returns from mutual funds are subject to the performance of the market security under current market conditions. As a result, there is no concept of assured returns, but instead, there are indicative returns. They are mostly considered long term investments as the losses get averaged out against the gains.
Investing in Fixed Deposits
Fixed deposits (FDs) are market-proof investment objects that can provide returns of the range of 8% per annum depending on the tenure of investment and the financial institution chosen.
Banks and Non-Banking Financial Companies (NBFCs) provide FDs with cumulative and non-cumulative interest payout options and renewal of the same. Some institutions also allow loans against FDs. So if you want to invest money in fd then you need to know pros and cons about fixed deposit investment.
FDs are safest kind of investments but there are certain rules attached to it which many do not know. As an investor you must have knowledge about these rules before you invested.
Most of the rules are enclosing points about TDS and its effect on the interest that you earn on your investments. Also, the interest that you earn is taxable after a certain limit.
Let us Find out More About These Rules which help us to avoid to pay tax on FD–
You can save on TDS by filling in Form 15G or 15H, So before investing you must follow this above mention rules for fixed deposit.
Investment decisions made without prior thought, consideration and research can prove to be detrimental for one’s financial health. For most investors, the two aspects of investments that take maximum of their attention include the risk and returns. The right balance between these two factors is found in case of PPFs, FDs, and even mutual funds.
Fixed Deposits are financial instruments offered by banks and NBFCs wherein the investor deposits funds for a particular tenure to earn returns. PPFs require the investor to deposit money for up to a particular time and gain returns when the term of deposit ends. Mutual Fund Investment are made on company stocks and shares and the earnings are based on the performance of the company in the stock exchange.
Here, we are comparing the key aspects of all the three investment options named above:
Both PPFs and FDs are tenure bound- this means that the amount invested and the returns from them are received at maturity. Mutual funds do not have a lock-in period and the funds can be accessed at any stage of the investment.
Safety of Returns
Returns from FDs and PPFs are independent of market fluctuations, which means that unless there is any economic policy issued by the Reserve Bank of India, their returns are unchanging. Returns from mutual funds are subject to market conditions and the actual returns can vary significantly from the indicated returns.
Tips to know Which is Better Saving Account or FD or Mutual Fund
Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms.