Fixed deposit is one of the most popular investment options in India. It is a type of investment where an individual can invest a fixed sum of money for a fixed period and earn a fixed rate of interest. Despite the availability of many other investment options, fixed deposit has remained a popular choice for investors. In this blog, we will discuss why fixed deposit is still a popular choice for investors.
Low Risk:
One of the biggest advantages of fixed deposit is its low-risk factor. Fixed deposits are considered to be one of the safest investment options as they are not affected by market fluctuations. This makes it a preferred choice for risk-averse investors who do not want to take any risks with their investments.
Guaranteed Returns:
Fixed deposit offers a guaranteed rate of return, which means that the investor knows exactly how much they will earn on their investment. This is beneficial for individuals who are looking for a steady source of income and want to avoid the uncertainties of the stock market.
Liquidity:
Fixed deposits also offer high liquidity, which means that the investor can withdraw their funds at any time. However, premature withdrawal may attract a penalty or a lower interest rate.
Tax Benefits:
Fixed deposits also offer tax benefits under Section 80C of the Income Tax Act, 1961. An individual can claim a deduction of up to Rs 1.5 lakh by investing in tax-saving fixed deposits.
Easy to Manage:
Fixed deposits are easy to manage as they do not require any expertise or knowledge of the stock market. Individuals can open a fixed deposit account with their bank or financial institution and manage it easily.
