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How to Invest and Save Efficiently With Fixed Deposits?
Posted on Thursday, September 9th, 2021 | By IndusInd Bank
Let’s face it. Earning money is hardly enough to achieve financial stability. The key is knowing how to save and grow your wealth to fulfil all your financial goals. So, how you put your disposable income to use is important. This is where investment instruments step in. If you are new to the world of investment, opening a fixed deposit (FD) is an excellent place to begin your investment journey.
Millions of Indians rely on fixed-term deposits to park their hard-earned money. When you open a fixed deposit with a new-age bank like IndusInd Bank, you enjoy modern banking services and competitive interest rates!
Here’s how you can save and invest your wealth efficiently using an FD.
Leverage the Power of Compounding
An excellent hack to earn more using an FD is to earn interest on interest! How? By choosing the cumulative FD plan. While a non-cumulative fixed deposit pays you regular returns, the cumulative option allows you to accumulate the interest amount and re-invest it with your principal amount. Therefore, you earn even more on your deposits, which can grow into a substantial amount over the long term.
Avoid Premature Withdrawals
When you withdraw your investment funds before the end of the tenure, you might have to pay a penalty. Hence, premature withdrawals can be detrimental to your financial health, and you must choose the tenure carefully to avoid such situations.
Instead of an untimely FD withdrawal, you can consider other mediums to fund immediate expenses and keep your investment intact.
Ladder Your Investment
Another practical approach to make the most of your savings is to spread your amount across different tenures. To achieve this, you must open multiple fixed deposits with different maturity periods. Why? Because your money is not tied up in a single account. When an emergency strikes, you can liquidate one of your deposits to tackle it.
So, if you plan on investing a lump sum, opt for the laddering technique to distribute your wealth in multiple FDs.
Consider a Tax-Saver FD
If your goal is to keep your surplus funds safe while saving tax, a tax-saver fixed deposit is a perfect way to achieve this. Many banks offer the option of tax-saver fixed-term deposits. By opting for a 5-year tax-saving FD, you qualify for the tax benefits under section 80 C of the Income Tax Act. Also, make sure to research the rules and regulations related to the tax-saving deposit before opening the account.
Book a Fixed Deposit Online
Lastly, you can open an FD account online for a smooth and hassle-free user experience. At IndusInd Bank, we allow customers to open an account in a matter of minutes. Thus, you don’t have to visit the bank branch or stand in any queues to apply for an FD. This way, you can open a deposit instantly and start saving money today!
The Bottom Line
At IndusInd Bank, we believe that you should have a medium to make your money work for you. And a fixed deposit is a guaranteed-return investment avenue that can make this possible. Not only does it inculcate the habit of saving, but it also becomes the first step towards creating an investment profile.
To learn more and open an FD account online, reach out to us today!
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.
