Why Youngsters Should Invest in Fixed Deposits – Top 5 Reasons

by John Judge Writer

Intelligent and safe investments can help you boost your savings and make your finances stable, especially if you have recently started your career. Know more about why a fixed deposit is an excellent option for you.

If you are still in the initial phase of your career journey, then saving must be your priority to ensure a strong foundation in terms of finances. With fixed deposits, you can grow your savings over time. These are considered safe, given the fact that they guarantee a fixed return on maturity. You can invest in regular fixed deposits, a 5-year tax-saving fixed deposit, or through the sweep-in facility, depending upon your requirements.

Let’s look at the top 5 reasons to invest in a fixed deposit:

1. Safe Investment with No Risk:

Fixed deposits are the most preferred investment option when it comes to safe and risk-free investments. Market situations don't affect the return on investment. The rate of interest is specified at the time of investment. In the initial phase of your career, when you can’t afford too much risk, fixed deposits are a great option.

 

2. Guaranteed Returns with Tax-saving Benefits:

The returns are guaranteed and specified at the time of investment. Different banks and corporations offer fixed deposits at attractive rates. Also, many banks offer even higher returns for senior citizens. Upon maturity, the principal amount and the fixed interest earned is transferred to you. Hence, it helps you to get your finances stable.

 

With a 5-year tax-saving fixed deposit, you can claim for a tax deduction up to 1.5 lakhs, under section 80C of the Income Tax Act, 1961. This is one of the simplest ways to save tax when you have just started your work-life.

 

3. Flexible Investment Tenures:

You have the flexibility to choose the tenure for which you want to make the investment. Though it may differ from bank to bank, generally the tenure ranges from 7 days to 10 years at one go. The interest rate varies for different time periods. Hence, you can invest as per your preferred tenure.

 

4. Suitable for Emergency Cash Requirements:

Fixed deposits act as a saviour when you need emergency cash. You have the option to break your deposit and withdraw money even before maturity. Hence, in case of any medical or other emergencies, you can get cash handy. When you have just started your career, you may not have much cash with you for such contingencies, and that's where these deposits can help you.

 

5.      Stable Returns even When the Market is Low:
In times of uncertainties or when the market is low, the returns on your investment stay safe and guaranteed. The promised rate of interest is still applicable and is not impacted by market volatilities. When you can’t afford to take much risk, fixed deposits can prove to be the solution for you.

No-Risk and Guaranteed Return with Fixed Deposits:

With no-risk and guaranteed returns, a fixed deposit is a great choice for everyone and especially for youngsters who want to keep their investments safe. You can check out the FD rates of different banks and pick the one that suits you.

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Created on Jul 27th 2020 02:03. Viewed 284 times.

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