7 Reasons to Invest in Fixed Deposits

Posted on Friday, June 9th, 2023 | By IndusInd Bank

Fixed deposits (FDs) are preferred by risk-averse investors because they offer assured returns. But there are several other reasons – such as flexibility, ease of access, tax benefits, and availability of loan facility – that make FDs a worthwhile investment option.

Every person wants to see their hard-earned money grow and multiply. That said, most people, particularly Indians, remain risk-averse, reluctant to invest their money in instruments that may yield lucrative returns but aren’t without the risk of high losses either. A tried-and-tested, and trusted instrument of investment, fixed deposits FDs have retained their popularity primarily because they are so simple to understand, requiring little to no degree of financial expertise. That, alongside the fact that FDs offer assured returns on investments is an enduring reason for their glowing reputation. Interestingly, FDs offer plenty of other advantages as well – many, not widely known. Read on to discover seven cogent reasons to open a fixed deposit account even if you aren’t a risk-averse investor! and invest your precious money in one.

7 Reasons to Invest in a Fixed Deposit

1) Attractive Rate of Interest

If you have idle funds lying in your account anyway, fixed deposit interest rates are better than those offered by savings accounts. Moreover, FDs occasionally yield better returns than similar risk-free instruments of investment such as Treasury Bills and Government Bonds.

2) Flexible in Nature

With an FD, there is complete flexibility with regard to the tenure of investment which typically varies from 7 days to 10 years. Moreover, depending on your financial needs, you could choose a cumulative FD and receive the accumulated interest at the time of maturity, or a non-cumulative FD in which you would receive the interest pay-outs at regular intervals – annually, half-yearly, quarterly, or monthly.

3) Easy to Access

FDs were easy to open in the past but have become even easier to open online, thanks to the digitalisation of banking. Furthermore, FD accounts are fairly easy to liquidate, giving you instant access to your money lest a financial emergency strikes.

4) Tax Benefits

If you are looking to obtain tax benefits, you could invest in a 5-year tax saving FD and claim a tax deduction for up to INR 150,000 under Section 80C of the Income Tax Act. Even in case of a regular fixed deposit account, TDS is deducted only if the annual interest income exceeds INR 40,000.

5) Availability of Loan Facility

The humble fixed deposit is a dependable investment. You can always avail of a loan or overdraft against your FD in case a financial emergency arises.

6) Easy to Monitor

Unlike stocks or mutual funds, an FD does not need to be monitored. It is a straightforward investment in which the interest rate remains the same throughout the tenure. All you have to do is invest in a fixed deposit, and wait till maturity.

7) Guaranteed Returns

Fixed and assured returns are arguably the FD’s greatest claim to fame. A fixed deposit is indeed unaffected by market fluctuations, and comes with the promise of guaranteed returns on your investment amount. IndusInd Bank even lets you use a free FD interest calculator for computing the interest you will earn and the amount you will receive at maturity on investing a particular sum of money for a specific time period.

IndusInd Bank Fixed Deposit

An IndusInd Bank FD offers several benefits to investors. Some of the key advantages are:

Ø  IndusInd Bank offers higher FD interest rates as compared to other top private banks in India

Ø  Experience hassle-free instant booking involving only 3 easy online steps in which you merely need to share your PAN and Aadhaar details and complete your Video KYC.

Ø  Get auto-renewal option and choose from among multiple options for interest pay-outs – monthly, quarterly, half-yearly, yearly, or at maturity.

Ø  Investment tenures range from 7days-10 years, enabling you to meet your short-term and long-term financial goals with ease.

Convinced of the merits of a fixed deposit account? Invest in a fixed deposit with IndusInd Bank and watch your money grow!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.