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Saturday , 22 September 2018
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Fixed Deposits Are a Must fora Balanced Investment Portfolio

Fixed Deposits (FD) are considered as one of the safest investment options since the returns are guaranteed. This is why most people prefer to invest in fixed deposit. FDs also help to balance the investment portfolio, which may comprise a mix of varied investment avenues such as equity, mutual funds, gold, real estate, PPF, etc. Another great thing about fixed deposits is that the computations involved are fairly easy to understand. Using a FD calculator, one can easily calculate the returns they will get on their investment.

If you are looking to create a balanced investment portfolio, you need to invest a minimum of around 20 to 30 percent of your available funds in fixed deposits. When you invest in a fixed deposit, it will provide effective hedging against investment risk. The returns on FDs can be relatively lower, but they carry significantly lesser risk, as compared to equity, mutual funds, gold, etc. You can use a FD calculator to check the quantum of returns you can get on various FD amounts.

Here are some keybenefits that you can derive when you invest in fixed deposit.

  • Flexible investment tenure: You can choose to invest in FD for anywhere between 7 days to 10 years. You can choose short duration FDs if you have funds for a limited period of time. However, if you commit to longer durations, you can get higher returns on your investment.
  • Attractive interest rate: For FDs of more than one year, you can easily earn around 7 percent on your investment. Equity and mutual funds may give better returns, but they are susceptible to market risks.
  • Online FD: You can invest in fixed deposit online via internet banking or mobile app. No need to visit the bank branch to open an FD.
  • Start small: You can start an FD with just Rs 5000 via internet banking or mobile app. You can start with small amounts every month, which will gradually accumulate into a much bigger amount.
  • Automatic rollover facility: You can choose to get the interest credited to your FD account or paid out to you. If you need the interest income, you can choose to get the interest paid out to you. If not, the interest will be credited and added to the principal.
  • Premature encashment: In case of an emergency, you may need to encash your FD prematurely. However, there’s no need to worry since the premature encashment penalty is minimal. The longer you stay invested, the less will be the premature encashment penalty.

Fixed deposit (FD) is simple, risk-free and offers secure returns on your investment. Idle funds in your savings accounts can be transferred to a FD account to almost double the quantum of returns. With the facility to open FD online, there’s no reason why you should not make the best possible use of your available funds. You don’t have to commit for long term since FDs are available for a tenure of just 7 days. You can choose longer tenures, as per your specific needs and requirements.

Fixed deposits can help grow your wealth in a secure manner, all while providing you complete peace of mind. They are a must if you are looking to create a balanced investment portfolio.

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