Investments have become an integral part of everyone’s life nowadays. No one wants to keep their money in their bank accounts, where there are lower returns. Instead, people want to invest in the best schemes to inflate their money. One of the most preferred investment plans is Provident Funds (PF). It not only keeps the money safe but also offers a great return percentage. But in case you have already put your money in PF or don’t find it beneficial enough according to your income, you should move on to the next best investment scheme, i.e., an FD account.
Here are a few factors that make Fixed Deposits (FDs) an excellent investment option.
This aspect of an FD makes it even better than PF. Where PF is only available for the salaried Indian residents, FD investments can be made by several other people, such as:
- Indian Residents
- Corporation Firms
And many more…
So when you don’t fit for the PF eligibility, you can go for an FD.
Unlike other investment methods, there are little to no market risks in FD. Therefore, you will surely get the amount you deposit. Moreover, fixed returns are also assured. That is why you need not worry about anything because your funds will remain safe in an FD.
PF accounts usually have a lock-in period of 15 years. This means your deposited funds get locked for 15 years, and you can’t use them in any case. However, there is no such worry with an FD. Different banks and organizations offer different FD tenures that can range from 12 to 60 months. So you can conveniently choose the term as per your preference. You also have the flexibility to prematurely withdraw the money from an FD account in case of need. The only loss here is the fixed deposit interest rates. All the rest amount will be given to you.
Generally, all investment methods have deposit limits. For example, you can deposit a maximum amount of 1.5 lakh per year in the PF account. But there is no such limit with an FD account. Even if your bank or organization does provide you with a maximum deposit amount, it will be much higher than the other option’s limit. So you can remain stress-free.
Apart from these significant advantages, there are also some minor perks of opting for FD. This includes:
- The fixed deposit interest rates are usually higher than most of the investment options. It means you will receive a much-inflated amount with it.
- The money earner as interest through an FD investment falls under the tax exemption for up to 1.5 lakh, as per Section 80 C.
- You also have the option to open a joint account for FD. This facility isn’t available for PF accounts.
These factors show that FDs are highly beneficial for everyone. Therefore, you should invest in this scheme to make the most out of your accumulated funds and use them in the future.