Fixed deposit, commonly referred to as FD, is an investment option which is offered by banks and non-banking financial companies (NBFC) to their customers. This investment option has been one of the most popular investment options and it helps individuals save their money. With the help of FD account, individuals can invest a significant amount of money at a pre-determined interest rate. This investment is for a fixed period. Once the tenure ends, individuals get the lump sum amount and an interest amount. Different banks provide different rates of interest for FD account. Individuals can opt a fixed deposit for a period ranging from at least 7-14 days to 10 years. Therefore, an FD is sometimes referred to as term deposit. When an individual opens up an FD account, they get a guaranteed interest rate. This rate of interest remains the same, irrespective of any changes which can be because of market fluctuations.
The interest that investors earn is paid at maturity or on periodic basis depending on the choice. Investors cannot withdraw the money before the maturity. If they want to withdraw funds, a penalty can be imposed.
Since some of the industry veterans work with VSRK Capital, we can help in suggesting an appropriate investment avenue. Investments should be made after considering risk appetite and other factors like age, goals, etc. VSRK Capital has a wealth of experience in suggesting sound investment options.
Since rate of interest in FDs varies from bank to bank, there are financial institutions offering high returns on FDs. FDs are considered as a risk-free investment and are suitable for individuals approaching retirement. This is because they refrain themselves from being subject to high-risk investments. In comparison, individuals in the early 20s or 30s should have high exposure to equities as they have higher risk appetite.