FD or Fixed deposit is also called as Time deposit or TD. Fixed signifies ultimate, definite or decided and deposit signifies storing money in a specific account. Thus, the deposit done at a fixed ROI or rate of interest for a set time is known as Fixed Deposit. It may be performed at the bank, any NBFC or post office.
Normally, FDs offer more interest than savings account. Prior getting the FD, know how the interest would be appended to Fixed Deposit Account. Some banks append interest on the yearly base and some banks append interest to the account on a periodical base. For longer time the FD is done, the ROI normally grows as well.
One of the secure and problem free investment products is a FD. It offers a normal man an ideal method to safeguard his future. Cash deposited in the bank in different fixed deposit plans are characteristically insured for a definite sum. This insurance is a type of assurance via government.
Advantages of Fixed Deposit:
Fixed deposit is one of the very popular saving alternatives in the nation. Individuals like to invest in FD due to its suppleness and liquidity. It is the simplest and safe method of investment. The investment stays safe and the maturity worth of maturity sum is previously set and assured. Whenever you require you may ruse and take out the sum. Some of the banks provide loans and credit cards at a reduced rate of interest in place of the FD or fixed deposit.
The ROI on Fixed Deposit:
The ROI on FD is diverse in each bank, but there is no huge dissimilarity in them. This rate may differ from 4% to 8% according to time period of FD or Fixed Deposit. Some banks also provide additional interest on huge deposits. If rate of interest is more than rate of price rises, then there is the true advantage in investment. If the interest rate on fixed deposit is not more than price rises, then the sum you will get at the time of mellowness really can be no more than the sum invested.
If somebody wants to invest for over 5 years and prepared to take the peril, then he may invest in the Mutual fund, but if somebody wishes to invest problem-free and for less time, then FD is the best option.