Fixed Deposit accounts are popular in India since the inception of the banking system. Investors are comfortable with the instrument as it is considered safe and reliable. The return is fixed and so is the maturity date, making the investment option very trustworthy especially for women. Fixed deposits are the best choices for people who are risk-averse and are seeing safe options to invest.
The best FD interest rates are offered by banks and NBFC’s. Some banks offer higher returns to women. The rates are better than the interest rates in savings accounts. This financial instrument not only saves your money but also offers capital protection, assured returns and security. You can also get a loan against your FD if there is a need for money during the tenure. Women are more conservative in their investment in most cases and this security bodes well for them.
Types of Fixed deposits
The banks generally offer deposits that are covered by deposit insurance to the tune of Rs 1,00,000. The interest paid by the bank is based on the rates that are generally a tad low because the bank is virtually a no-risk investment.
NBFC’s and other financial institutions may offer you Company deposits or CDs. These are basically FD’s which fund companies. You can choose the tenure and the rate of interest is higher than regular bank FDs. The Company deposit may be slightly risky. Choose a CD which enjoys high credibility, stability and an AAA+ credit rating.
Fixed Deposit Interest Rates
Interest rates fluctuate in the market. The banks have to fix a rate at the time of deposit, and that remains valid for the time period you have taken the Fixed Deposit for. The prevailing interest rates mandated by the Reserve Bank of India are what govern the banks in setting rates for FD’s. The different banks have a little margin of difference. Once you lock your investment in the interest rates stays fixed for the term.
Benefits of FD’s for women
It might be a good idea for a woman to invest in an FD as there are many benefits in using the investment instrument.
- You get a higher interest rate than your savings account. You can choose a cumulative interest paid out at the end of the term, or you can opt to access the interest every month, quarter, bi-annually or annually as per your requirement.
- The gains are assured and you get a fixed maturity amount at the end of your tenure. The interest rates are not dependent upon the market fluctuations, so your returns are secure.
- Some banks offer a marginally higher rate of interest to women and senior citizens.
- You can choose tenure from six months to ten years. In the course of the term, you may pre-close one FD and open a new one on new terms.
- If you are short of money during the tenure, you can take a loan and return when possible. Or the amount will be adjusted on maturity.
The safest investment in the market can be availed of with as little as Rs 10,000 as an investment.