As per the data from the Reserve Bank of India, the trend in Fixed Deposits is at its hike even today. There is a continuous rise in deposits spotted in Indian Banks. The simple reason being the collection of the huge Capital which is the sole motive of savings. Having a fixed deposit have several advantages and disadvantages, the blog below describes it precisely.
Advantages of investing in fixed deposit:
- This method of investment is completely Safe. The investment up to the capital amount of 100,000 is guaranteed by Credit Guarantee Scheme of India and Deposit Insurance. There is the least risk involved in this investment.
- You can acquire the loan on fixed deposits and the rate of interest is only 1 to 2%, above Fixed Deposit rate
- There is good liquidity in bank deposits. You can withdraw the deposits any time and can take the money within a few hours, the maximum time is 48 hrs.
- The rate of interest does not fluctuate much, there are only small variations.
- The time period of the deposits can be decided as per your choice, you can go for any time span ranging from 7 days to 10 years.
- There is a huge convenience in creating a bank deposit as you can choose the amount as low as Rs 100 to any amount with no upper limit. All you need is a PAN Card to support your
Disadvantages of fixed deposit:
- The interest on your deposit is taxed. You have no benefit in the intermittent withdrawal or closure.
- You cannot withdraw prematurely to invest in other potential options, as there is a penalty on withdrawal
- No capital appreciation applies to your capital amount in fixed deposits.
- It just secures your capital amount the growth of investment is very low.
- There could be a reinvestment risk
You can have numerous advantages by investing in bank fixed deposits. To optimize the profit you can contact Fixed Deposit Advisors who can refer you with a best possible suggestion regarding the amount, interest rate, time period etc.