Best answer: Is Fixed Deposit good option for investment?

1. Safety: An FD is a relatively safe investment option. Market fluctuations do not impact the locked-in interest rate. However, Liquid funds can provide similar if not better, level of safety and returns.

Is investing in FD a good idea?

Fixed deposit accounts are an excellent investment vehicle for those investors who don’t want to bear any risk. If you wish to sustain the money over the years and are not looking for growing wealth or if you are looking for steady returns, you can go for FD accounts.

Which investment is better than fixed deposit?

Mutual funds that have potential to generate returns higher than bank fixed deposits over an investment period of about 1 year. These mutual funds do not have a lock-in period nor an exit load compared to Bank FDs which come with a penalty for premature withdrawal.

Can you lose money in fixed deposit?

However, if we go by the experts’ advice, an investor investing in Bank FD may lose money in case the bank becomes a defaulter. … If an investor is slated to get an amount in excess of Rs 5 lakh as maturity amount, then such investors won’t get more than Rs 5 lakh, in case of bank default.

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Can fixed deposits make you rich?

#1: FDs give returns below inflation

The average inflation rate in India for 2012-2014 was 9.76%. Most FDs only give you about 8.5% interest before tax and around 7% after tax. This means, you are effectively losing money every year you invest your money in a FD.

Is FD bad investment?

1. Safety: An FD is a relatively safe investment option. Market fluctuations do not impact the locked-in interest rate. However, Liquid funds can provide similar if not better, level of safety and returns.

Which FD scheme is best?

List of 10 best FD schemes for 3 years

  1. Fincare Small Finance Bank. Fincare offers attractive rates of interest on the 3-year tenure. …
  2. KTDFC. A lucrative rate of 6.00% p.a. is paid for term deposits opened for a period of 3 years. …
  3. Shriram City. …
  4. Mahindra Finance. …
  5. Sundaram Finance. …
  6. LVB. …
  7. ICICI Home Finance. …
  8. Yes Bank.

Why is Fd not good?

While volatility is seen as a risk by many investing in mutual funds, inflation must be seen as a big risk for FD investments. If adjusted for inflation, fixed deposits actually generate negative returns. … This means the investment of Rs 10 lakh would grow to Rs 14.4 lakh after 10 years.

How can I get maximum interest on fixed deposit?

Try and apply for cumulative deposits, as they tend to compound interest. Banks compound interest every quarter, while company Fds do not. The law of compounding will ensure higher yields in the future. Some companies like KTDFC compound interest every month, so your yields tend to be very high.

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Where can I get maximum interest on my money?

Here is a look at 10 investment avenues Indians look at while saving for financial goals.

  • Direct equity. …
  • Equity mutual funds. …
  • Debt mutual funds. …
  • National Pension System (NPS) …
  • Public Provident Fund (PPF) …
  • Bank fixed deposit (FD) …
  • Senior Citizens’ Saving Scheme (SCSS) …
  • Pradhan Mantri Vaya Vandana Yojana (PMVVY)


What are the disadvantages of fixed deposit?

Below are three disadvantages of investing in fixed deposits:

  • No flexibility to access your funds. Because your money is locked away with the bank, often for months (sometimes years), you lose the flexibility of a regular, day-to-day savings account. …
  • Relatively low investment returns. …
  • It is not sexy.


Can I break my 5 years fixed deposit?

5 Year FD Rates

Banks offer a higher rate of interest to senior citizens on regular term deposit. The Tax Saving FD is also for 5 years, but it does not allow premature closure or breaking of FD before the end of tenure. Currently, among banks, the highest rate of interest is provided by PNB Housing Finance @ 6.70%.

How much interest will 5 lakhs earn?

How much monthly income: At the current interest rate of simple interest of 7.3 per cent, on a principal amount of Rs 5 lakh, the total interest comes to Rs 1,82,500, which yields Rs 3,041 as the monthly interest amount.

Can I withdraw FD interest monthly?

Can we get monthly interest on Fixed Deposit? Yes, you can get monthly interest payouts, if you choose periodic payouts and select monthly frequency. When you invest your money in FDs, you gain interest on your principal amount, which can be obtained periodically.

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How can I get money from fixed deposit?

How to earn more from your fixed deposit?

  1. Highlights.
  2. Higher interest rate with company FDs.
  3. Compounding interest with cumulative FDs.
  4. Maximize gains by re-investing fixed deposits.

What is the maximum FD amount?

There is no upper limit. For tax-saving fixed deposit, the upper limit is Rs. 1.5 lakh. You can open a recurring deposit for a minimum of Rs.

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