Is It Good to Invest In FD?

Posted on Tuesday, June 13th, 2023 | By IndusInd Bank

A Fixed Deposit account provides a secure and reliable way to grow wealth, with a fixed interest rate free from market fluctuations. Invest in an IndusInd Bank FD for a stable financial future.

Investing your money in the right place can be somewhat tricky due to the easy availability of a vast array of investment opportunities. But you may narrow down the options by considering your income, expenses, financial goals, and risk tolerance. A fixed deposit (FD) is a great option if you are a risk-averse investor, seeking a secure path for increasing your wealth regardless of market changes. A fairly straightforward investment option, an FD is dependable and secure. What’s more, it is easy to get started with, even if you are new to investing.

Let us explore what fixed deposits are and how they work.

What Is a Fixed Deposit (FD)?

In simple terms, a fixed deposit is an investment option in which you give a lump sum amount to a bank or financial institution for a predetermined time period. When that period gets over, the bank returns your initial investment amount and interest accrued until that point. While interest rates may differ between banks, fixed deposits typically yield better returns than savings accounts. FDs can be availed for wide-ranging tenures, from 7 days to 10 years.

What Makes Fixed Deposit the Best Investment Option?

Here are some compelling reasons to invest in a fixed deposit:

1) Security

Compared to other market-linked investments, fixed deposits are viewed as a highly secure option. They do not undergo fluctuations in value, making them a low-risk choice. A fixed deposit account comes with the promise of guaranteed returns when the account matures.

2) Liquidity

The money in a Fixed Deposit can be withdrawn prematurely but doing so requires a small penalty to be paid. The premature withdrawal option offers the advantage of liquidity, enabling you to access your FD in case of an emergency.

3) Higher Interest Rates

Fixed deposits typically offer higher interest rates as compared to regular savings accounts. Senior citizens enjoy higher FD interest rates than those offered to regular investors, which can help them maximise their investment returns.

4) Assured Returns

Investing in a fixed deposit comes with the benefit of knowing the exact amount you will receive upon maturity. Since the rate of interest is predetermined, you are sure to receive guaranteed and fixed returns, irrespective of a sluggish economy or declining interest rates.

5) Flexible Tenures

You may choose a Fixed Deposit tenure ranging from 7 days to 10 years. This gives you the freedom to choose an investment tenure that best meets your financial needs and objectives.

6) Compounding

Investing in fixed deposits provides the benefit of compound interest, allowing interest to accrue on both the principal amount and interest earned. This may lead to higher returns and faster growth for your investment.

7) Multiple FD Accounts

It is possible to open multiple FD accounts at the same time. Spreading your savings across FDs with varying tenures and interest rates enables you to diversify your portfolio and even save taxes.

8) Tax Exemption

Taxes are levied on interest received from fixed deposits. However, for senior citizens, the interest earned up to a maximum of Rs. 50,000 in a financial year is exempted from taxes. Additionally, by investing in a Tax Saver FD – with a lock-in period of 5 years – you could claim a tax exemption of up to Rs 1.5 lakhs in a year on your FD investment.

Why Should You Invest in an IndusInd Bank Fixed Deposit?

Investing in a fixed deposit account with IndusInd Bank is an excellent way to grow your wealth over time. The bank offers several advantages, including hassle-free instant booking with video KYC facility, best-in-class interest rates, and flexible tenures. Additionally, there is an auto-renewal facility as well as a multitude of options for interest payouts i.e. monthly, quarterly, half-yearly, yearly, or at maturity. Last but not least, given IndusInd Bank’s reputation for outstanding service and customer satisfaction, you are sure to enjoy a smooth banking experience!

Secure your financial future with a reliable partner! Invest in a fixed deposit with IndusInd Bank today!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.