Safe and Steady – Benefits of investing in fixed deposits

Investing in fixed deposits has long been one of the most popular and reliable ways to earn interest on your money. Fixed deposits, or term deposits, are essentially savings accounts where you invest a certain amount of money for a fixed period of time, ranging from a few months to several years. The money you invest accrues interest over the term, which is paid out to you at the end of the period. In this article, we will explore the various benefits of investing in fixed deposits and why you should choose the Bajaj Finserv app for your fixed deposit needs.  

One of the primary benefits of investing in fixed deposits is the security they offer. Unlike other investment options like stocks or mutual funds, fixed deposits are not subject to market fluctuations or volatility. This means that your investment is safe and you can rest assured that you will get back your principal amount along with the interest earned at the end of the term.  

Another advantage of investing in fixed deposits is the predictability of returns. The interest rates for fixed deposits are fixed at the time of investment, which means that you know exactly how much you will earn at the end of the term. This makes it easier to plan your finances and budget accordingly.  

Fixed deposits are also highly flexible and customizable. There are various types of fixed deposits available to suit different needs and preferences. For example, you can invest a lump sum amount for a fixed term or choose to invest smaller amounts on a regular basis through a recurring deposit. You can also choose to reinvest the interest earned or choose to receive it as a regular payout.  

In addition to these benefits, fixed deposits also offer tax benefits. The interest earned on fixed deposits is subject to tax, but you can claim a tax deduction on the amount invested under Section 80C of the Income Tax Act. This can help to reduce your overall tax liability and increase your savings.  

Fixed deposits are considered one of the safest investment options due to their low risk and guaranteed returns. This is because of various reasons which are as follows:  

1. Guaranteed Returns: When you invest in a fixed deposit, the interest rate is pre-decided, and the returns are guaranteed at the end of the term. Unlike stock markets where the returns are uncertain and depend on market conditions, fixed deposits offer a fixed rate of interest.  
2. Low Risk: Fixed deposits are low-risk investments as they are not subject to market fluctuations and are not affected by economic conditions. This means that the returns are not dependent on the performance of the economy, making it a safe and reliable investment option.  
3. FD Insurance: Fixed deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) for up to Rs. 5 lakhs per depositor, per bank. This means that even in the event of a bank failure, the depositor is not at risk of losing their money.  
4. Principal Protection: The principal amount of a fixed deposit is not affected by market volatility or interest rate fluctuations. The amount invested is secure and is returned at the end of the term.  
5. Flexible Tenure: Fixed deposits offer flexible tenures which provide a level of control over your investment. You can choose a tenure ranging from a few months to several years, depending on your needs and objectives.  
6. Transparency: Fixed deposits are transparent, and the investors are provided with a detailed account of their investment. This means that investors know exactly how much interest they stand to earn and when they will receive it.  
7. Regular Income: Fixed deposits can provide a regular income stream, making it ideal for retirees or those who want to supplement their income. This is possible through a monthly, quarterly, half-yearly, or yearly interest payout option.  

Now that we have established the benefits of investing in fixed deposits, let’s take a closer look at the various types of fixed deposits available.  

1. Regular fixed deposits: As the name suggests, these are the most common type of fixed deposits where you invest a lump sum amount for a fixed period of time. The interest rate for regular fixed deposits is slightly higher than that of savings accounts.  
2. Recurring deposits: In this type of fixed deposit, you invest a fixed amount of money on a regular basis, usually monthly, for a fixed period of time. These deposits are ideal for those who want to save regularly and earn interest on their savings.  
3. Flexi fixed deposits: Flexi fixed deposits offer the flexibility of withdrawing money from your fixed deposit account without penalty. These deposits are ideal for those who may need access to their funds in case of an emergency.  
4. Tax-saving fixed deposits: These deposits allow you to claim a tax deduction on the amount invested under Section 80C of the Income Tax Act. The minimum lock-in period for these deposits is 5 years.  

5. Senior citizen fixed deposits: These deposits are specifically designed for senior citizens and offer higher interest rates than regular fixed deposits.   

There are many fixed deposit apps available that allow investors to invest in fixed deposits. Here are some of the popular ones: 

1. The Bajaj Finserv app is user-friendly and easy to navigate, making it ideal for even first-time investors. You can choose from a range of deposit options, including regular fixed deposits, recurring deposits, tax-saving fixed deposits, and senior citizen fixed deposits. The app also allows you to manage your investments, track your earnings, and access customer support 24/7. 

2. Groww – Groww is an investment platform that allows users to invest in fixed deposits. It offers an easy-to-use platform, where users can open an FD account or invest in an existing FD account. They can choose from various fixed deposit options and track their investments on the app. Groww charges no fees or commissions for investing in fixed deposits. 

3. Stable Money – Stable Money is a platform that offers multiple fixed deposit options like regular FDs, tax-saving FDs, senior citizen FDs, and more. It is an easy-to-use platform with no paperwork involved. Users can open or invest in an existing FD account on the app. It offers high interest rates and flexible tenures. They also offer an Autopilot feature that helps users automate deposits. 

4. Citi Bank – Citi Bank’s mobile app allows users to invest in fixed deposits. They offer different types of fixed deposits, including tax-saving FDs. It offers competitive interest rates and flexible tenures. The app has an easy-to-use interface and allows users to track their investments. 

5. HDFC Bank Mobile App – HDFC Bank Mobile App allows users to invest in fixed deposits. Users can choose from different types of fixed deposits, including tax-saving fixed deposits. The app offers an easy-to-use interface, and users can open or invest in an existing FD account on the app. 

6. Axis Bank’s Fixed Deposit Plus – Fixed Deposit Plus is an app by Axis Bank that offers high interest rates on fixed deposits. Users can open or invest in an existing FD account on the app. It allows investors to track their investments and offers flexible tenures.  

In conclusion, investing in fixed deposits is one of the safest and most reliable ways to earn interest on your savings. Fixed deposits offer security, predictability, flexibility, and tax benefits, making them an ideal investment option for the risk-averse investor.