Fixed Deposit: Know Why an FD Is a Relevant Option for Your Portfolio

Posted on Friday, February 9th, 2024 | By IndusInd Bank

Fixed deposits are a safe and secure investment option for investors across risk profiles. Safe from market fluctuations, FDs offer flexibility, diversification, and tax savings. Build a robust portfolio with IndusInd Bank’s flexible and secure fixed deposits.

Building a robust investment portfolio is a matter of balancing gains with stability. Market-linked instruments such as stocks and mutual funds are certainly popular for their wealth-creation potential. However, market volatility always translates into risk, which can be offset by investing in risk-free instruments, such as fixed deposits.

FDsoffer fixed returns over a certain period, bringing certainty and stability to your investment portfolio. Thus, they are an excellent way to diversify your portfolio and safeguard your corpus against sudden market fluctuations. Undoubtedly, FDs make for a safe and rewarding investment avenue for investors of all risk appetites.

In this guide, we’ll bring you insights into the benefits and necessity of fixed deposits for any investment portfolio.

Five Reasons Why You Need Fixed Deposits in Your Portfolio

1. Safe from Market Fluctuations

FDs make for a highly beneficial addition to your investment portfolio due to their inherent safety and stability. Unlike market-linked investments, FDs are not subject to market volatility. Thus, your invested principal remains secure regardless of market fluctuations. This makes FDs an ideal choice for risk-averse investors. Additionally, the fixed interest rates offered by FDs provide a predictable income stream, a particularly valuable feature during economic downturns when other investments might underperform.

2. Flexible Investment

A primary benefit of investing in FDs is that you can customize the scheme as per your financial goals.

For instance, seeking regular interest payouts on a monthly, quarterly, half-yearly, or annual basis will provide you with a steady secondary income stream.

Or, if you are saving for a big purchase in the future or for your retirement, you can lock in your idle funds for the long term in a cumulative fixed deposit account. In this manner, your corpus increases over the fixed deposit’stenure, accelerating wealth growth.

3. Diversification

Diversification is all about balancing risk with reward. While equity, stocks, and mutual funds are excellent ways to earn substantial returns in the long term, they come with inherent risks. FDs serve as an excellent tool for balancing risk in a diversified investment portfolio, offering a haven during uncertain economic times.

4. Loan Against FD

If you are facing an immediate financial crunch, you don’t have to necessarily liquidate your FD. Banks nowadays provide loans against fixed deposits, which can essentially keep your investment safe while also providing you with financial assistance in times of need.

5. Tax Savings

As per Section 80C of the Income Tax Act, any investor can claim tax deductions amounting up to INR 1.5 lakhs per year with tax-saving FDs. However, a tax-saving FD comes with a lock-in period of 5 years in the course of which no premature withdrawal, loan, or overdraft facility is allowed.

Features & Benefits of IndusInd Bank Fixed Deposits

IndusInd Bank provides high-yielding and flexible FDs that can help you grow your wealth steadily. Here are some features of IndusInd Bank FDs:

● Flexible tenures: IndusInd Bank offers you flexible term options ranging from 7 days to 10 years, allowing you to plan for both the short and long term.

● Attractive interest rates: IndusInd Bank provides competitive fixed deposit interest rates so you can reliably grow your wealth

● Instant booking: You can open an FD with IndusInd Bank in just three simple steps without extensive paperwork. You only need your PAN and Aadhar Card to book a fixed deposit account.

● Tax saving: IndusInd Bank also offers 5-year tax saving FDs that allow you to further optimize your earnings.

Optimize your Portfolio with IndusInd Bank’s High-Yield Fixed Deposit Accounts

Fixed deposits are, undoubtedly, a crucial part of any investment portfolio. Whether short or long-term, FDs can help you earn a steady source of income and build a substantial corpus for your retirement.

Start building your portfolio with IndusInd Bank’s rewarding FD schemes. Enjoy attractive interest rates, flexible interest payouts, and hassle-free instant online booking with IndusInd Bank.

Learn more here.

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.