Several individuals find Fixed Deposits to be a safe investment option. It is one of the most secure investing methods, as market conditions do not affect them. Even though many other investment options are available, people still prefer to open at least one FD. Let us understand the unique features that make FDs so popular:
Definite returns
One of the primary reasons you might choose to invest in FD is the assured rate of returns. After you make your investments, there is a definite guarantee that you will receive your principal amount and the added Fixed Deposit interest rate. Nowadays, with the addition of an FD interest rate calculator it is easier to calculate the interest you will earn after investing a lump sum for a dedicated tenure.
Flexible tenure
You can choose FD tenure at your convenience. The tenure can be as low as seven days and can go up to a maximum of 10 years. You can choose any tenure that suits your requirements. You must ensure that the tenure does not clash with your financial goals and cause any disturbance to your plans.
Easy Loan against FD
Getting your Loan sanctioned against FD is an easy process. Banks instantly approve this Loan as you already provide collateral in your FD money. Moreover, in an emergency, you can keep your FD for funds. You can simply apply for a Loan and access the required money. However, you are required to pay off the Loan before your Fixed Deposit tenure comes to an end.
Customisable interest pay-outs
You have two ways to collect the interest earned on your investment. They are popularly known as cumulative and non-cumulative. If you want to receive the returns at the end of the tenure, you should go with a cumulative payout. On the other hand, if you select the non-cumulative interest, you will pay the interest monthly, quarterly, or yearly.
Sweep in facility
With the help of a sweep-in facility, if you run low on liquid cash, the bank will automatically transfer money from your Fixed Deposit to your Savings Account. This feature is highly beneficial in times of emergency. Your interest rate will not be affected if you use this feature. You can easily use the money in times of trouble and still earn consistent returns on your principal amount.
Tax reductions
A Tax-Saver FD lets you save taxes and earn interest like a regular FD. You can quickly reduce your tax liability if you open this FD and do not face any deduction on the interest you earn.
Conclusion
FDs are very simple and secure, making your investment profile more versatile. These added benefits will work in your favour. If you are confused about making a choice, you can consider these features and make a better choice.
