Even During The Pandemic, Good Old Fixed Deposit Is The Safest Way Of Investment

One thing almost everyone¡¯s parents say when talking about investments is to get a Fixed Deposit. There is a reason for that. Fixed Deposits are the safest way to get an assured return, something not all investments can boast of.

With the vaccines slowly getting ready to be rolled out, we're hoping to put the pandemic behind us soon. However, we are not yet there. People have lost their jobs, some have taken - or are taking - salary cuts, and several investors have suffered losses. If you are someone surplus money in your hand and unsure of where to invest, not knowing what might yield return, you should take a proper stock of the market that currently seems to be somewhat unstable. Many business operations have slowed down, many have shut, according to the experts, investing in unknown markets is a huge risk especially in times of crisis.

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But you can still make safe investments with assured returns that offer interest at a fixed rate - in fixed deposits. Even during the pandemic, good old fixed deposit will/has come to the rescue.

Here is why it is a good idea to invest in fixed deposit during the COVID-19 pandemic.

1. You can start with small contributions

Fixed Deposits are considered to be the safest of all investment options. You will get the money and the interest, even in the worst-case scenario. This is a good time to save and invest a good amount with assured security. By putting some funds into a fixed deposit account you can earn interest. You have the freedom to choose your preferred tenure, which ranges from 12 to 60 months or even more.

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You will earn interest at the rate prevalent on the deposit date. If each month you make a new contribution and that contribution creates a new fixed deposit; for each deposit, you will earn a separate interest rate.

This is one of the safest ways to put your money to work in this current situation.

2. A stable investment environment

In a stable investment environment you will earn the highest FD interest rates. Your commodity or equity-linked investments are vulnerable to market fluctuations, but you can stay away from interest and capital loss with a fixed deposit.

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There are many different types of FDs available, and you can choose one that suits your requirement. You can make a one time FD with certain a amount for the tenure of your choosing as well.

3. Fixed returns

Fixed deposits offer returns at a fixed rate. The interest rate can vary from 7-9% or above, depending on the bank and the option you are considering. At a reputable institution, you can earn at a rate of up to 8.05%, when the tenure is at least 4 years or 48 months.

4. Surety Of Return

When investing in a fixed deposit you are already aware of the amount of money you will receive once it matures. The state of the economy does not matter, how the interest rates fluctuate does not matter, you will get the returns as agreed at the time of investing.

This is more than what can be said for investments such as stocks that are highly dependent on the fluctuations of the market which is currently highly unstable in the time of the pandemic.

With fixed deposits you are aware that there will be no surprises and the money will eventually come to you.

5. A good option for goals that cannot wait

Since FD investments promise a fixed return at maturity, you can invest in it for a goal that cannot wait.

For example if there is a financial goal that you need a certain amount of money for within a specific amount of time, FDs are an ideal investment as you can calculate the exact return you will get within a specific time period.

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You can look at the interest rate and tenure and accordingly deposit your money. This will help you achieve your goal in a timely manner.

6. Ideal For Short Term Goals

Goals that need to be achieved within one to three years are described short term goals. Fixed deposits help in capital preservation and offer a decent return at the same time.

For example if you want to go to a trip in the coming year or buy an expensive phone, fixed deposits are a good option for such goals. You will already have an idea how much the trip or the phone will cost and accordingly looking at the interest rate you can make an investment.

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The pandemic has taught us the value of money and saving like never before. People are having to live on a budget and while it is important to cut down on monthly expenses, it is also important to save and make safe investments for the future. Fixed deposits can be really helpful for short term goals.

Do discuss the details of the FD with your current banking institution to better understand the possibilities of the investment.