Best FD Schemes in 2022- Benefits of Investing in a Fixed Deposit

If you haven’t invested with an FD vehicle yet, you are actually behind on India’s most invested tool. It’s more like a tradition, where people follow. There are a lot of places where you can find FDs and a lot of reasons people choose them too. Being one of the most sought-after schemes in the country. With millions investing in them, this is a must-know answer. Finding the right fixed deposit can be overwhelming, but we can figure that out for you together. Here, you can learn about FDs in no time.

Understanding FDs

Fixed deposits are low-risk investment choices that provide individuals with better returns than traditional savings accounts. The interest generated on online fixed deposit amounts is compounded at regular periods. The interest rate on fixed deposits differs from one financial institution to the next. The majority of fixed deposits have a lock-in period during which the investor cannot withdraw funds.

Now, this is a good dish to see on the table right. Fixed deposits may not always bring you returns like that of a mutual fund and the stock market, but the internet rates are guaranteed and your investments are safe. Moreover, for senior citizens, the interest rates go higher than that of a normal investor.

What are the Features of an FD?

• It is a risk-free investment.
• It allows you to earn a high rate of return over a certain length of time.
• It has a variable tenure option.
• In a fixed deposit arrangement, there is no maximum amount.
• Senior citizens might benefit from favorable rates on savings plans.

Are all of them allowed to invest in an FD? Or is it only for a selective bunch? Let’s find out.

Who can Invest Through an FD?

1. Partner firms
2. Joint investors
3. Individuals
4. Societies
5. Sole proprietorships
6. Indian resident
7. NRI
8. Minors
9. Senior citizens
10. Companies

Now that you know the basics of an FD, are you eager to know more? Let us look at some of the best FD offerings in the country.

Best FD Schemes 2022

Fincare Small Finance Bank

• Fincare Small Finance Bank interest rates for a year are 6.3%.
• KTDFC interest rates for a year are 6.00%.
• Shriram City interest rates for a year are 8.84%.
• Mahindra Finance Bank’s interest rates for a year are 6.30%.
• Sundaram Finance interest rates for a year are 6.25%.
• Lakshmi Vilas Bank interest rates for a year are 4.75%.
• Equitas Bank FD rates for a year are 6.00%.
• The Yes Bank interest rates for a year are 6.50%.
• The Canara Bank interest rates for a year are 5.25%.
• The Punjab Sind Bank’s interest rates for a year are 5.30%.

Now, you have got to know that these rates won’t always be the same. The banks or the bodies that regulate them can frequently change. So, make sure you always check their updated interest rates.

Here are some of the advantages you can enjoy if you invest in an FD.

The Benefits of Investing in a Fixed Deposit

It has safety

Your FD’s interest rate is fixed – so your money is protected regardless of market conditions. You will continue to earn interest, which will be returned to you together with the principal amount at maturity.

You can alter it to your needs

Your FD’s can be altered to any of your needs. It can be suited to your preferred tenure and when you want to withdraw it. It is not like a scheme that has a fixed time horizon that you have to oblige with.

You can easily liquidate it

Your FD can be liquidated easily, and even before you reach maturity, but with a penalty that you will have to pay.

It can be collateral

Are you looking for a loan but don’t have any collateral? Don’t worry; you may pledge your FD and receive up to 95% of the loan amount. The loan amount is determined by the amount of the FD as well as the terms and conditions of your bank.

You can also save up on tax

Individuals can deduct up to 1,50,000 under Section 80C of the Income Tax Act of 1961. If your investment is a tax-saving fixed deposit, it is tax-deductible under this clause. This significantly minimizes your tax liability.

Your saving is insured

Your deposit is insured for up to 5,000 by the Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the RBI. This implies that even if your bank is experiencing financial difficulties, your FD remains secure.

It is a one-shot investment

You don’t need to keep up with the market to understand how your FD is doing. Furthermore, there is no jargon. This makes it simple for someone unfamiliar with the concept of saving and investing, like as a young student, to start an FD.

Conclusion

For investors who find safety and security to be their topmost priority – FDs are the best option. Though there are so many investment approaches coming out to the light these days, fixed deposits never seem to lose their catch in the wider financial world.