The Fixed Deposit
If you want to go one of the safest investments and for assured returns then FD can be considered. It looks like everybody has an FD and the above are the obvious reasons for that. As far stocks are concerned there is a lot of chaos hanging around regarding them. Economists say if you have options other than stocks then you should go for them. But it is a myth that investing in stock markets won’t get the money’s worth back. A view of stock markets as only good or bad won’t be able to give you a fair picture of it.
You may be thinking now that what is the best option for you. Here is a straight comparison between the pros and cons of the two:
Fixed Deposits: How good is it?
Now let us have a look at Stock Markets: Is it any better?
Read about the: FD Vs Equities: Which is better
Let’s quickly see what makes non-bank deposits useful:
Best options - FDs are one of the best options for investing your surplus money.
No taxation on FD – Tax saving Bank Fixed Deposits are those FD schemes in which the returns are good and they are not taxed. Investments of specific amount of up to Rs. 1,00,000/- needs to be done for availing such benefits for a minimum of 5 years. Such an investment is insured by a coverage of up to Rs. 1 lakh.
Options to choose from - Not only banks but NBFCs and co-operative banks also offer you to invest in FDs. Sometimes NBFCs offer a higher interest rates than banks. But make sure you invest in a reputed NBFC.
Returns on FD maturity - You can get your returns after the maturity of your fixed deposit according to the period structure you have chosen for monthly or quarterly basis and you may reinvest your amount.
If you are looking for higher returns which is more than savings account or PF account or if you don’t want the hassles of investing in equity then tax saving FDs is one of your best option.
Want to know more about it? Read here: http://gettingmoneywise.com/2017/06/what-is-non-bank-fixed-deposits.html
FDs with assured returns are now highly preferred by Indians with low risk appetite as compared to investing in gold. Moreover, with tools, like FD calculator, it is now very easy to invest in them while having a clear knowledge of the returns.
Let us have a look at the reasons that make FD a better investment option than gold.
When you invest in FD, you already know the interest rate that will be offered on your investment. Moreover, you can also use an Fixed Deposit Calculator to know that total amount that you will get at the end of the tenure. On the other hand, the return on gold is highly unpredictable.
You are required to pay additional Wealth Tax of 1% if you have gold worth Rs. 30 lakh, whereas, FDs are known as tax-saving instruments. They help in reducing your tax liability while increasing the total rate of return. Moreover, there are also ways through which you can avoid TDS on FD investments.
Minimum risk, low costs, etc. are some other reasons that make FD a better choice as compared to gold investment.
In future, whether you need financial security or you want to buy some luxurious goods, a good investment can make help you meet your financial goals. One way to manage your financial planning is to invest surplus funds judiciously. The best way to manage your surplus funds is to invest them instead of saving them. Investments can give you back high returns and these returns can be reinvested or spent the way you like.
There are few ways you can earn surplus income. For example, salary appraisals, or business profits all are sources of surplus income. You can easily invest your money by thinking wisely and acting smartly.
Your Investment Options:
Some investment options are stocks, mutual funds, fixed deposits, investing in gold, etc. When you invest in gold it becomes a onetime investment. You can sell your gold when you want some money. But gold rates are subject to change by the market forces. Similarly, stocks and mutual funds involve high risk. However, if you are looking for less risk and good returns, fixed deposits and FDs is a better choice.
FDs offer higher interest as compared to savings account and are considered one of the safest investment option. Nowadays, along with banks you have NBFCs as well who are offering attractive interest rates for FDs.
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.