Smart Way to Save: Invest in Fixed Deposit

Smart Way to Save: Invest in Fixed Deposit: When you’re young, saving money can seem intimidating. The uncontrollable thanks as well as request to pay cash to obtain month after month is the only responsibility we tend to feel ourselves and therefore do not trust the way to manage long-term or unexpected financial crisis.

One way to avoid wasting money on financial hardships is to start building a collaborative emergency fund. The first step is to decide where and how to invest your hard earned money. In India, fixed deposits are one of the most common and accessible investment instruments to avoid wastage of cash. One of the most important advantages of investing during a fixed deposit is that you cannot make premature withdrawals from a fixed savings account. Hence you can save easily to avoid any penalty charges or fees. Also, FD interest rates are not determined by market rates, so investors will get a secure return on their investment.

The remaining amount will be used after six hours of registration and on the UAN Member Portal itself.

What are hard and fixed deposits?

Hard and fast deposits offered by banks and non-banking financial institutions allow you to deposit lump sum payments on investments at a hard and fast rate of return for a specified investment period and earn attractive returns.

Here are the distinct advantages of investing in fixed deposits:

Versatile tenure:

Hard and fast deposits have investment tenures ranging from seven days to ten years. Thus, investors will choose short term, medium term or long term investment amount as per their investment goal.

Fixed Return:

One of the many advantages of investing in fixed deposits is that it offers a secure return on investment. Deposits offer fixed returns for the entire tenure, and hence the returns are not affected by the amount deposited in the linked FD account.

Interest Rate:

FD rate varies from bank to bank and area unit as per the run given in the policy. As the rates are not affected by the market, investors are assured of attractive returns on their investment.

Tax Benefits:

If a venture capitalist wants to get tax benefits on investment, he will invest during tax saving FD. A tax-saver FD can save you Rs. Allows induction of tax deductions up to 1.5 lakh on investment under Section 80C of the Tax Act. This type of fixed deposit is available for a hard and fast tenure of five years.

Loan against Fixed Deposit:

You can avail additional loan against fixed deposit by keeping FD as security or collateral. Investors can take loan against FD up to 90% of the amount deposited in Associate FD without breaking the FD. Interest rate on top of FD rates is 0.50%-2%.

Liquidity:

While hard and fast deposits attract penalty charges on premature withdrawal from FDs, investors will break the FD if they need funds for an emergency. Thus, having an FD ensures that they can refer to a certain amount of cash when they are in a financial crunch.

Thus, investors will simply open an associate FD account and earn more interest on their cash compared to keeping cash in a bank account. You can open associate FD account in any public or private sector banks or by visiting a post office branch or online provided by many banks.