It is imperative to save your earnings to achieve your financial goals as well as use the accumulated funds in case of unforeseen circumstances. Additionally, the growing awareness about investing from an early age has particularly encouraged students and working professionals to start investing their savings early. To do so, there are many options available in the market for every investor, but a Fixed Deposit continues to be a very popular investment choice.
Fixed Deposit or FD is an investment option provided by banks and Non-Banking Financial Companies (NBFCs) to help you grow your earnings safely and securely over a period of time. It is a very traditional mode of investment and undoubtedly a very safe and secure option to grow your funds. The monthly interest on FD’s is typically better when compared to depositing money in a regular savings account. It keeps your money locked in for a specific period of time and gives you a fixed rate of interest till the FD matures. Before applying for any FD, do not forget to compare rates for different organizations providing FD for eg monthly interest for 1 lakh in sbi, bajaj finserv, ICICI etc.
For students or working professionals, saving a good portion in Fixed Deposits is a very productive option as at the end of the deposit period, the depositor gets the principal amount along with the interest earned on the funds invested. Here are a few helpful tips on how a Fixed Deposit can help students and working professionals in their financial journey.
Tips for Students and Working Professionals
If you are a student or working professional, a fixed deposit is one of the safest investment avenues as its features and benefits outweigh a lot of other investment schemes. So if you’re looking to invest in a Fixed Deposit, here are some things to be mindful of:
- Amongst the various benefits offered by a Fixed Deposit, it comes with a loan facility option that can be really useful during any personal emergency
- It is necessary to understand the maximum and minimum deposit limits that are available by banks and financial institutions for students with limited income
- As there is no fixed maximum limit, if the deposit exceeds 1 crore, it is termed as a bulk deposit. In such a case, the depositor will earn higher interest rates than usual Fixed Deposits
- When you choose a Cumulative Fixed Deposit, you have the opportunity to reinvest the interest you earn. The interest can thus be credited to your account on a regular basis
- It is advisable to check with the bank in advance about their pre-mature withdrawal terms and conditions. Hence, in case the depositor is in need of funds before a Fixed Deposit matures, they can accordingly be prepared to arrange for funds
- Keep in mind that the term of a Fixed Deposit ranges from 7 days to 10 years
- It is also wise to be aware of the various provisions and policies of the bank in case of a fixed deposit
If you are a student or a working professional, a Fixed Deposit can be a great way to start your investment journey without compromising on returns and the risk factor. They offer assured and attractive returns that can be quite beneficial. So, if you’re a student or a working professional trying to ensure that your savings grow well, then Fixed Deposits are just the right investment choice for you.