Why Should You Opt for an FD During Uncertain Times?

Ruby McKenzie
4 Min Read

Financial markets can be unpredictable, and economic downturns can cause concern about the safety of your investments. In these uncertain times, it’s wise to prioritise security and stability for a portion of your funds. This is where Fixed Deposits (FDs) offer a safe harbour for your savings.

Let’s explore why you should consider FDs, especially during uncertain times.

Stability and predictability of returns

Unlike investments subject to market fluctuations, fixed deposits provide a guaranteed return. When you open a fixed deposit account, the bank will quote a fixed deposit interest rate. This means you know exactly how much interest your money will earn over the FD’s term.  FD interest rates allow you to plan financially with confidence.

Protecting your savings against inflation

Inflation can erode the value of your money over time. Fixed deposit account interest rate can help offset this erosion. While there may be times when inflation outpaces FD rates, in general, the interest accrued on your FD allows your savings to grow even as inflation occurs.

It’s important to look for FD options that offer high interest rates. For instance, INDIE Fixed Deposits offer an interest rate of up to 7.75% p.a., one of the highest in the industry. Simply download the INDIE app by IndusInd Bank and book an instant FD online to enjoy such high FD interest rates.

Flexibility to suit your needs

Banks offer a variety of fixed deposit schemes with different features and interest rates.  You can choose a tenure that aligns with your financial goals, whether short-term or long-term. The longer the tenure, the higher the interest income potential.

Additionally, many banks offer options like monthly or quarterly interest payouts, providing you with regular income if needed. Alternatively, you can reinvest the interest to benefit from compounding returns.

Safety and security

Fixed deposits are one of the safest investment options available. They are not exposed to market risks, and most banks offer deposit insurance up to a certain amount. This protects your investment in the unlikely event of bank failure.

Ease of investment

Opening a fixed deposit account is remarkably straightforward. Many banks offer the convenience of online account creation, eliminating the need for a branch visit. Compared to other investment options, the process of investing in FDs is notably hassle-free, making it an accessible choice.

Opportunities for higher returns

Some banks offer special interest rates for senior citizens. If you fall into this category, it’s worth comparing FD interest rates to find the most favourable options.

Also, consider other features like auto-sweep FDs. These convert a portion of your savings balance into a fixed deposit, allowing you to benefit from higher FD interest rates on funds that would otherwise sit in your savings account.

The bottom line

While fixed deposits may not be your only investment strategy, they provide a secure and reliable foundation for your financial portfolio during uncertain times. The guaranteed returns, flexibility, and safety features make FDs an appealing way to safeguard your hard-earned money. When assessing investment avenues, be sure to consider the value FDs may offer in your overall strategy.

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