Do You Know All the Advantages of a Fixed Deposit Account?

Fixed Deposit

As the world is growing fast and people on it live in major hustle-bustle, everyone looks for immediate results. They want their investments to give instant results. As investing in higher risk generated area gives high returns people often opt for investments like mutual funds, shares, equity, etc.

But not everyone wants investments which involve high risk in it. Fixed deposits can be the one if you are in search of low risk involved investment. Invest in Fixed Deposit is a safe option and also gives easy and high returns.   

Now, fixed deposits are the easiest way and a commonly preferred to save some funds. Fixed deposits are measured as a safer option as opposed to the stock market and mutual funds. Term deposits can be of two types: fixed deposits and recurring deposits.

Fixed deposits are the best investment option for the salaried individual because you will have to devote your funds only once. Since the rate of returns is high, they are considered as the best option for the masses. One of the advantages of fixed deposit is that the rate of interest is not easily affected by the volatility of the market. Another advantage is that the amount that you invest gets an insurance of about INR 1 lakh so even if the financial institution goes into a loss, your money is safe.

Since the tax is levied if you earn more than INR 10, 000 as interest returns from your fixed deposit in one financial year, you need to calculate in advance how much return you will be earning. There are many online calculators available where you can check your interest returns. If you are earning more than INR 10, 000 in tax returns then you can split the investment amount into smaller amounts and invest them in different fixed deposits.

With the fixed deposit market changing drastically over the past few decades, it is not known to a lot of people that even companies provide the facility of fixed deposits. While both banks fixed deposits and company fixed deposits have their own attraction, it is necessary to know which is better.

Fixed deposits are a onetime investment option where you will devote all your funds at a single time. If you opt for recurring deposits, you will have to invest your funds regularly over a period of time. The procedure of the fixed deposit is very easy and it is considered extremely secure.

The interest rates on fixed deposits are high which enables you to earn high returns. Interest rates offered by different banks on fixed deposits differ. They also depend on the funds you invest plus the tenure of your investments.

How to Invest in FDs

If you are going for banks fixed deposits, banks offer you insurance worth INR 1 lakh. In case you are investing a huge amount then this can sound a bit low. So, here you can split up the surplus amount that you have and invest these split up amounts in various different investment options or fixed deposits. This will not only make sure that you do not go broke if you face a loss in an investment, but it will also give you a higher rate of returns.

This can be also done when you want to earn high returns. You can simply split your amount and deposit into different FD accounts as this can give you high returns over your lump sum amount.

Withdrawing from an FD

Withdrawing your funds from a fixed deposit is difficult as FD restricts you from withdrawal. In the case of withdrawing your funds, you need to break your FD which can cost you a penalty to the bank and will also make your interest rates low.

But in a case of financial emergency, you can use the overdraft facility as this allows you to withdraw up to 90% of the amount of your account. You can simply write a cheque and withdraw the amount. But, here you have to pay the interest on the amount you withdrew on the last day of your overdraft.

Also, you must know that fixed deposits offer a fixed interest rate which remains constant irrespective of the market conditions. The interest doesn't change, unlike the mutual funds which get affected by market conditions.

Also if you have invested in tax-saving fixed deposits which come under the Section 80C, you will be eligible to claim tax benefits. The interest helps you save a major sum of tax. The tax is deducted to the only ones who have an interest rate above INR 10,000.

If you are a senior citizen you will be benefiting with higher interest rates on FD than others. Also, you may earn higher returns if you go for reinvestments. Thus, investing in a fixed deposit can be a safe and beneficial option for investing your funds.

Similar Articles


Ordinals are much like NFTs on other blockchains and are created by inscribing Satoshis with data (image, text, video, and any other type of arbitrary data). These digital artifacts don’t store data off-chain and don’t use smart contracts, although they’re perfectly compatible

 Stock Exchange graph on laptop and mobile screen

The Indian stock market is the best place for wealth generation. If you are a seasoned professional or a beginner investor, you need a thorough understanding of the stock market to make wise decisions.


With all the ascensions and popularity achieved by cryptocurrencies in the last few years, it would be fishy to claim that investing in one or two digital coins has never crossed your mind.


Australia's stable economy and regulatory framework provide a conducive environment for domestic and international investors exploring investment opportunities. This comprehensive guide will walk you through buying Bitcoin in Australia, providing a clear and concise roadmap to kickstart your cryptocurrency journey. 


Living in the technology era is an advantage for both companies and clients, as it is possible to make payments faster, easier, and more secure. For the past few years, crypto has shifted from being a speculative investment into a valuable transactional tool, and businesses worldwide have adopted cryptocurrencies as a payment method


As cryptocurrency continues to capture the attention of investors worldwide, Australians are increasingly drawn to the potential opportunities presented by this dynamic market. In the ever-evolving landscape of the cryptocurrency market, staying ahead of the curve is crucial for investors


Ethereum, the blockchain platform known for its native cryptocurrency, Ether (ETH), has become a focal point for investors and traders looking to explore the potential of the digital currency market. 

Top 5 Properties for First-Time Real Estate Investors

Real estate investments have always been a popular choice for people who want to diversify their portfolios and build long-term wealth. For first-time investors, however, choosing the right investment property can be a daunting task. With so many options available, it can be challenging to know where to start

Gold Bars

There are many reasons to invest in gold, but one of the most appealing is that it is a finite resource. While gold mining operations can extract large quantities of metal from the earth, there is only so much gold. As demand for gold increases, the price will continue to rise.