Why Fixed Deposit (FD) Is a Good Investment Option?

Posted on Friday, October 25th, 2024 | By IndusInd Bank

One of the major steps towards securing your financial future is to invest wisely. Among the various investment options available, fixed deposits (FDs) stand out for their safety, reliability, and guaranteed returns. 

FDs have been a favourite amongst the old and the new generation as they have something to offer for everyone. So, whether you are a conservative investor, a beginner, or someone looking to diversify your portfolio, a fixed deposit investment can be a good option for you. Let us explain why. 

Why an FD Can Be the Right Investment Option for You?

If you are wondering, ‘Is FD a good investment for me?’, then looking at the following benefits might provide you with the answer:

1. Safety and Security

One of the primary reasons why many prefer an FD is its safety and security. It is not subject to market volatility, which ensures the safety of your principal amount. So, what you invest remains secure throughout its tenure. 

In addition, banks that offer fixed deposit investments are well-regulated. This means an extra layer of security to your funds.

2. Guaranteed and Clear Returns

To add to the safety and security aspect of an FD investment is its ability to provide you with guaranteed returns. FDs provide assured returns since the interest rate is fixed and remains unchanged throughout the tenure. This means that you can plan your finances with an exact figure of how much you will earn by the end of the term. 

3. Suitable for Short-term and Long-term Goals

FDs offer a wide range of tenure options – from 7 days to 10 years. This allows you to choose a duration that goes along with your financial goals. An FD investment is suitable if you are looking for a short-term investment to park surplus funds. It is also ideal as a long-term option for stable growth. 

4. High Liquidity

FDs are designed to be held until maturity. However, a fixed deposit investment will also offer liquidity options if you need access to your funds before the term ends. Most banks allow premature withdrawal of FDs. However, it comes with a penalty. Irrespective, this feature can help you access your money in case of emergencies. 

5. Attractive Interest Rates

Interest rates can vary based on the tenure and the amount invested. Senior citizens can benefit from even higher interest rates on their FDs.

IndusInd Bank offers high Fixed Deposit interest rates – as high as 7.75% for those under 60 years, and 8.25% for senior citizens. Book an FD with us to start enjoying high returns! Click here to check the updated interest rates.

6. Tax Benefits

Investors can enjoy tax benefits by investing in tax-saving FDs under Section 80C of the Income Tax Act. These FDs come with a lock-in period of five years and offer tax deductions up to ₹ 1.5 lakhs. Note that the interest earned on FDs is taxable. However, the principal amount invested in tax-saving FDs provides a significant tax advantage.

7. Easy to Open and Manage

Opening and managing an FD investment is straightforward and hassle-free. Most banks, including IndusInd Bank, offer online facilities for opening fixed deposit accounts. Even non-IndusInd Bank customers can use our web portal to easily book an FD and enjoy our high interest rates.

Also Read: What is a Top-Up Fixed Deposit (FD) & What are its Benefits?

Conclusion

Fixed deposits are a tried-and-true investment option. An FD is a good investment option due to its attractive interest rates, tax benefits, and easy management. By opening an FD with the right bank, you can secure your financial future easily.

With IndusInd Bank, you not only enjoy high interest rates and a hassle-free application process but also flexible tenures and the option to choose an interest payment frequency of your choice. 

Book a Fixed Deposit with IndusInd Bank now to start enjoying these benefits! 

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your 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 making any financial decisions based on the contents and information.