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4 Amazing benefits of fixed deposits

We list the 4 prominent reasons why a fixed deposit is the ideal first step in creating a healthy financial corpus for the future.

Fixed deposits have been most people’s go-to investment option from time immemorial. It is one of the safest options which shows guaranteed growth on your money, which cannot be said of most other investments.

You have the chance to increase your wealth, save money regularly and be financially secure with a fixed deposit. You can use a fixed deposit interest calculator to find out how the interest rate affects its appreciation and what the matured amount of money will be. The fixed deposit calculator helps you plan the tenure such that the deposit appreciates and matures in time for you to fulfil a major financial milestone in the future. Every leading bank offers fixed deposit calculators for you to plan the deposit properly.

The 4 benefits of creating a fixed deposit

The fixed deposit, as explained above, is one of the most reliable and simplest investment options open to investors today. They increase your net worth and also offer these 4 amazing benefits:

  1. The interest rate does not change throughout the deposit tenure. The biggest advantage of creating an FD is that the interest rate remains the same throughout the deposit tenure, whether the bank offers lower interest on new deposits or whether the market rates fluctuate. Thus, you know from the start of the deposit what the capital appreciation on your money will be. Please use an online fixed deposit interest calculator to find out the numbers involved.
  2. The FD is highly liquid. You might face a sudden financial emergency and need money quickly. At this time, you might have to break into your savings, or dip into your other investments. But instead of disturbing your personal finances, you can easily liquidate the FD instead. You can do this after the lock-in period has elapsed, but do note that you will only get the principal investment back and not the interest payable on it.
  3. You can borrow a loan against the FD. Another important benefit of the FD is that you can borrow a loan against it. This helps in a financial emergency. Leading banks normally charge the same FD interest rate on the loan as the interest being paid on the deposit.
  4. You get back the principal whether the deposit matures or faces premature termination. Other market-linked investments may tank or succeed, but the FD always appreciates in value. You are certain about getting back all of the principal deposit that you created even when you prematurely terminate it. Meanwhile, you get the principal amount plus interest when the deposit matures.

Post Author: Fathiyya Al Shaikh

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