What is a Fixed Deposit (FD) | Types of Fixed Deposits (2024)

Why Fixed Deposits Are a Safe and Secure Investment Option?

The financial surety that Fixed Deposits (FDs) bring investors is undeniable. In times of financial uncertainty and continually changing markets, FDs stand out as a symbol of consistency and provide a dependable way to grow some of your hard-earned money. Investors can rest easy having a precise idea of how much their investment will increase over a particular term.

Long-term investment in Fixed Deposits are a safe path towards financial growth. Let us look at the benefits of FDs and how it can contribute towards improving your finances.

Understanding Fixed Deposits

For a better understanding of why Fixed Deposits are a rewarding and secure investment option, it is important to know how they work. Fixed Deposits, also referred to as term deposits or time deposits, involve placing a certain amount of money with a financial institution for a set period of time.

When you open a Fixed Deposit you effectively lend money to a financial organisation. In exchange, they offer you an annualised rate of interest that will stay consistent during the term of your deposit. This set interest rate is one of the most important variables influencing the safety and reliability of Fixed Deposits.

You have the option to select a term for your deposit that corresponds to your monetary goals, whether it is just a couple of months, a year or a few years. The longer the tenure, the greater the return on your investment.

Steadfast Stability: The Foundation of Fixed Deposits

When it comes to financial stability and reliability, Fixed Deposits are at the forefront of assured financial offerings. Here’s why:

1. Stable and Assured Returns

Primarily, Fixed Deposits provide an assured return on investment. Unlike other investment options subject to market shifts, these deposits come with a stable rate of interest. This ensures you can clearly analyse and forecast your returns, and plan a clearer, better financial tomorrow.

Your investment is safe from market fluctuations. The surety of fixed returns becomes even more important during economic downturns. You will always have peace of mind knowing you have got money you can fall back on during an emergency.

2. RBI Regulated

Fixed Deposits offered by banks are regulated by the Reserve Bank of India (RBI). The RBI sets guidelines and regulations that banks must adhere to when offering FDs. These regulations ensure banks maintain a certain level of financial stability and credibility, providing investors with an added layer of assurance.

3. Customisable Tenures

Fixed Deposits also come with wide-ranging tenure options. You may customise the value of your investments to meet your monetary objectives, whether you choose a short-term or long-term commitment. This freedom allows you to personalise your finances according to your particular needs, whether for a short-term gain, long-term growth or even retirement.

4. Save on Taxes

Another great feature of Fixed Deposits is the possibility of tax savings. Several Fixed Deposits, commonly referred to as Tax-Saving Fixed Deposits, provide tax advantages under Section 80C of the Income Tax Act. By investing in these deposits, you can get some great tax exemptions while your financial asset keeps growing.

5. Liquidity, Security and Accessibility

One of the more notable benefits of Fixed Deposits is liquidity, which strikes an equilibrium between security and availability when it comes to your money. While Fixed Deposits are recognised for stability and fixed returns, they also provide scope for effective liquidity management.

While there is a stipulated period of time for which your money is invested, if you find yourself in a position where you need to withdraw funds before the end of your term, you have the option of premature withdrawal with most FDs. Although, there could be charges and fees, they are not unreasonably high and you can get your money if the need arises.

6. You Can Avail Credit Against FDs

In addition to allowing early withdrawals, certain Fixed Deposits allow you to borrow money against your deposit. This means that if you need money for a specific reason but do not want to break your Fixed Deposit, you may borrow against the actual worth of your investment. This function allows you to satisfy your financial commitments while keeping your Fixed Deposit untouched.

Surety and Freedom with Fixed Deposits

By investing in a Fixed Deposit, you have the freedom to handle your funds and simultaneously enjoy the benefits of a safe and dependable investment.

Fixed Deposit rates like every other investment, are influenced by numerous elements that predetermine your investment's performance. However, once you know what you stand to get, you can be sure to get it when your deposit matures. Knowing this should allow you to make an informed choice while choosing your next FD.

If you are ready to experience the safe and dependable investment choice of Fixed Deposits, look no further than ICICI Bank, and take a step towards achieving financial security.