Increasing wealth through Fixed Deposits

Since investing is a multi-faceted discipline, one should go about it only in an informed manner. Your investment portfolio should be well balanced to avoid the high-risk investments and also to ensure that their portfolio earns a decent return even while avoiding the vagaries of the stock market. It should also depend upon your investment style and risk-taking appetite. Unlike high-risk, high-yield investments like derivatives, equities, fixed deposits provide consistent returns in specified periods. With other investment options becoming volatile and it becoming difficult to churn out positive returns on investments, many people are getting attracted towards fixed deposits.

In a fixed deposit, your money is invested with a financial institution for a fixed amount of time at a fixed interest rate. Usually, the deposit cannot be withdrawn before the maturity period. Some financial institutions do allow the withdrawal before the maturity date but it usually does attract a penalty. One can earn anywhere from 6% to 11% depending on the investment amount, the term period, etc. One can invest in a fixed deposit scheme from a fortnight to a maximum of 10 years. One can choose to receive interest at half-yearly / quarterly / monthly intervals. Senior citizens enjoy an additional 0.25% to 0.5% on most fixed deposit schemes.

Nowadays, one can even link fixed deposits and term deposits to their savings and currents accounts. This way one can sweep in money from their deposits into their savings accounts in time of need. Also, several institutions allow one to secure a loan of up to 75% of the value of the fixed deposit. This is called overdraft and it comes in handy when one requires quick access to loans. As with most financial instruments, fixed deposits too are not completely risk-free. A fixed deposit can be easily opened by submitting a few documents like a KYC (Know You Customer) form, address proof, identity proof to name a few. Invest in fixed deposits and earn risk-free, consistent returns on your investments.