Top 6 Benefits of Fixed Deposit (FD) Schemes

The fixed deposit has been one of most people's most preferred and go-to investment options for many years. It is because there are many benefits of fixed deposit investments for individuals. A fixed deposit scheme builds saving habits among individuals and builds some wealth to deal with an emergency. This investment option is versatile, provides safety to invested money, and offers flexibility and high liquidity. 

6 Nonignorable Benefits of FD schemes

#1. Simple investment

Whether or not you know about the fixed deposit scheme, you can invest in it easily. Generally, your banking person helps you fill out the form and open an FD account. Here you can choose any investment amount based on your budget. However, you must ensure your FD amount meets at least your monthly or quarterly financial requirements. The FD scheme tenure can vary from one year to 10 years.

#2. Fixed income

A fixed deposit is a very secure investment scheme available for investors. It gives guaranteed returns on the invested value. The rate of interest rate may vary from bank to bank and category of individuals. However, tenure remains the same for most FD schemes. Therefore, you can consider any bank and get an FD scheme to build a fixed income source.

#3. Benefit of compounding 

The depositor also has the option to choose the FD with reinvestment option; here, you do not only get interested in the principal amount but also in the interest you earn. It's the best thing you can see in an ideal fixed deposit scheme. 

#4. Flexible investment

FD requires a lock-in period from one to ten years, but still, it's a very flexible investment. It is because when you need a quick fund, you can withdraw up to 90% of what you invested; if you do not need all the money, you can withdraw a small portion. Hence, it's another advantage of fixed deposits for individuals.

#5. Regular income option

Nowadays, investors also have the option to receive interest on a monthly or quarterly basis. So, if you want to make a regular income from the FD scheme, you can choose the monthly or quarterly interest pay-out option.  

#6. Tax saving benefits

If you invest in an FD scheme for tax benefits, it's a great decision. Under section 80C of the Income Tax Act, you get a certain exemption limit. Investing in fixed deposits can receive deductions of up to Rs 1,50,000 and save some tax. 

Summary

There are many benefits of fixed deposit investment if you have some fun and want to put it in a secure place. Investing in an ideal FD scheme can be the right decision. It is because you get tax savings, compounded interest benefits, a higher-interest rate than SB accounts, and much more. I hope you have a clear idea of the advantages of fixed deposits. If you like this article, please share your thoughts in a comment and also feel free to share it. 

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