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Why Fixed Deposit is Important for your Investment Portfolio

To have a consistent and long-term growth of investments, one must have a well-diversified investment portfolio. It should contain both high-risk and low-risk investment options. The high risk usually brings in more profit and the low risks bring more stability to the investments. Fixed deposit is one of the best low-risk investments the Fixed Deposits rate in India tends to remain constant and brings multiple benefits to your investment portfolio.

Assured returns

As the investments made in Fixed Deposits remain unaffected by the volatile market fluctuation, they guarantee assured returns to the investors. This Helps in multiplying the wealth in a much reliable manner and further helps in planning the future finances with stability. The FDs provide the highest level of security out of the most financial instruments in practice. It is also a great way of balancing the funds without curbing the returns. It doesn’t matter how the economy would performer what the rate of interest will be. One is already aware of the amount that will be received on maturity. The Fixed Deposit rates in India are not volatile and help in gaining an assured return. 

Low risk involved

As compared to other available instruments of investments in the market, FDs are one of the safest schemes to invest in.Due to the low volatility around the fund’s deposit in the FDs the capital is considered to be the safest here. To arbitrage risk and create a source of assured returns on the investment having fixed deposits in your portfolio is an essential option. It is suitable for a high-risk investor who wants to cap the invested capital or someone who is a lower risk-takerand wants secured returns. One can even use a fixed deposit calculator in order the estimate the returns. 

Multiple Savings at a substantial rate

Investing in Fixed Deposits not only carries assured returns and minimal risks but also helps the investor is earning significantly when they pick up the right issuer. Some company FDs provide a higher interest rate more than that of the Bank FDs. Choosing the right FD product will for sure provide you with the highest returns. With the power of compounding, a small amount of the fund can turn into a bigger amount.

Easy investment process

The process of investing in a fixed deposit is hassle-free.You can start an FD with even a small amount and access to several unique facilities which they offer as that of auto-renewal. This ensures periodic liquidity to the investor and helps in laddering the FDs effortlessly. If you are looking for the security of comfort to be a part of your investment portfolio then FD is a must to have. With the help of a fixed deposit calculator the returns can estimate in prior and future investment can be planned in advance. 

Provides loans for emergencies

In case of the requirement of sudden emergency funds, one can use their investment in FD smartly. Banks often provide loans against these fixed deposits. This is helpful in case of emergencies and this way you will not lose out on your returns on investment. The banks usually sanction up to 70% of the FDs amount. The rate of interest on loans against the FD is also quite competitive.  Not just a loan but we can even withdraw our funds easily from a fixed deposit before its maturity in case of need. You may have to pay a certain amount of penalty but the process of withdrawal before maturity is simple. This enables you to have easy access to your funds in a time of need. It not only provides assured returns but also ease of access to the same. 

Suitable to achieve short term goals

As an investor, it is very essential to understand the goals of your investment. Are you looking for long-term returns or short-term goals? the purpose of investing is usually to increase wealth. However, if you are objective is to earn profits on a short-term basis then the FDs must be a part of your investment portfolio. FDs provide surety of return on maturity and no risk involved. This makes it a lucrative investment option. The Fixed deposit rates in India provide good returns and can help in achieving short-term objectives. 

In summary, it can be said that having a diversified portfolio is a must and making Fixed Deposit a part of it would be a wise choice. They provide multiple advantages and great returns. The stability which FDs bring to the portfolio helps the investor in the planning of their future financial ventures.

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