There can be many ways to get a surplus fund. You might have a surplus fund coming from your business or have got a salary appraisal or something else. But investing them can be the best option rather than putting it in your savings account. Savings account investment cannot be as beneficial as a fixed deposit account. The interest offered by your funds is low in a savings account.
You can instead go for an investment in shares, mutual funds or even FD. Though this all involves a certain amount of risk, it also provides you with high returns. Fixed deposit is one where there is less risk involved compared to other investment options.
Instead of opting for an FD you can also invest in gold, mutual fund, etc. as this can give you much higher returns than FD gives. Despite a higher return offering they also involve a higher risk which you may not be willing to carry.
Fixed Deposits are the easiest and a commonly preferred way to save some funds in India. Fixed deposits are measured as a safer option as opposed to the stock market and mutual funds. Term deposits can be of two types: fixed deposits and recurring deposits.
Fixed deposits are a onetime investment option where you will devote all your funds at a single time. If you opt for recurring deposits, you will have to invest your funds regularly over a period of time. The procedure of the fixed deposit is very easy and it is considered extremely secure.
FD is a secured option compared to other investments. Also, it can be best if you are planning to play it safe when it comes to your investment plans. Fixed deposits provide with interest that can offer you a higher returns.
If you take a look, FD is much safer than investing in gold or a mutual fund. As fixed deposits are provided by banks they are much more trustable. Investing here assures the investors that their hard earned money is safe also giving them good returns.
Also, fixed deposit investors have offed insurance worth INR 1 lakh which can be great. This can sound a bit low if the amount you are investing is huge. But there is also a solution to this, you can divide your fund into the smaller amount and then invest it in different options. This can give you an advantage of the insurance of each investment. If you wish you can also open a joint FD or open FD account across different banks.
It’s not essential that the investments you do should only be from a business profit or a salary hike, instead it can even be the amount coming from your retirement pension which you wish to invest. This can be one of the best sources of having a steady income if you are retired or a senior citizen. You can also have FD accounts in many different banks which may lead to lesser interest rate, but still can be an income.
In the case of an emergency, you can also withdraw your funds before its maturity. You can also close your fixed deposit account before it gets matured. But this will make you pay a penalty amount to the bank. As well as this will affect your future interest rates by lowering the rate of interest.
Instead of closing your FD account you can also use the overdraft facility wherein you can withdraw 90% of the amount from your FD account. Here the bank will charge you interest which if you have to repay the overdraft amount.
Investing in an FD can be much more beneficial to you as it involves less risk, provides good interest rate and also offers insurance.