Saving is one of the biggest part of our Financial Planning. We are taught to save since our childhood days, as savings can be used for some emergency expenditures. Savings also encourage a sense of security knowing our immediate expenses can be covered. However, savings directly with a bank in form of an account or investing in FDS is all a matter of your requirements,
A bank account is accessible, you can walk into the bank and withdraw your money at any point of the day. Additionally, if you require money immediately to meet any expense, say a doctor’s fee or your child’s education, you can make a payment using online payment methods, without a worry or hitch. The downside for this is that you know your money is accessible and you may use it to meet needs that are not so urgent or necessary. Interest rate is dependent on market forces.
FD investment for a locked in period. You will earn a pre-decided rate of interest on the amount you are investing, and market forces will have no role to play. Your bank or NBFC will clearly tell you the amount you will receive at the end of the tenure. In case of an emergency, you can either borrow money against the FD or pay the bank some penalty to break the FD.
So, if you are looking for a long term saving gains, investing in an FD is definitely more advisable. Read more about why FDs make a better option for saving.
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.