Know is FD a Good Investment Option for you?

A Fixed Deposit is not the first instrument that strikes us when we consider investment options. To many, the lack of liquidity and low interest rates are a major reason for staying away from this form of investment. But, the plain and simple FD can be used as a wealth creation option. In times when the stock market takes a beating, or there is uncertainty in returns, the good old FD definitely trumps other forms of investments. If you are wondering how FD is better than any other investment, then this guide is for you.

Here are 5 reasons why is FD the best investment option:

  • Sweep out facility:

    This is the best option that banks make available to their Savings Account customers. By enabling this option, excess funds over a particular limit get converted into a Fixed Deposit. This converts Savings Account funds into higher interest earning funds. Whenever the funds are needed, the bank withdraws that amount from the Fixed Deposit, but the balance continues to earn interest at higher rates. This facility has the chance to create a significant amount of wealth for people putting their funds in Savings Accounts.
  • TDS limit:

    The income earned from a Fixed Deposit will not attract TDS unless it crosses the limit of Rs. 40,000( Rs.50000 for senior citizens ). It is also possible to submit a form 15G for non senior citizens and Form 15H for senior citizens. On submission of this form, the bank will not deduct TDS on the Fixed Deposit income. This puts a greater sum in the hands of the person who makes the FD investment.
  • Flexible period of investment:

    Fixed Deposit can be opened with a bank for periods from 7 days to 10 years. Depending on the period for which the funds have to be invested, the Fixed Deposit rates vary. However, you can calculate the interest you will earn using the FD calculator that will help you make a formed decision. FDs provide safety of capital even for short term deposits.
  • Auto renewal facility:

    Most banks will auto renew your deposit if standing instructions are given. This makes it an extremely convenient investment option to have. If you’re wondering how FD is better, the convenience of an FD cannot be matched.
  • Loan facility:

    It is possible to take loans against Fixed Deposits up to a particular limit. If you’re wondering is FD best investment option, then this loan facility trumps other forms of investments available.

Want to open a Fixed Deposit? Click here to get started!

Want to know more on how a Fixed Deposit works? Click here to know how!

​​​​​​​Create hassle free Fixed Deposits with HDFC Bank Savings Account. New customers create a Fixed Deposit by opening a new Savings Account, existing HDFC Bank can create their Fixed Deposit by clicking here.

*Terms and Conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.