Since November 2016, after demonetisation took India by storm, you can see people visiting banks frequently. Apart from drawing money from ATM, they are keen on opening a fix deposit account.
Thanks to technology, you do not have to wait in long queues to submit any form. NBFC banks like Bajaj Finserv have an option of an online application form. You only need to enter your personal details, attach scanned documents and get instant approval from the bank.
Fix deposits are chosen for one primary reason- better yields when compared to savings account. Further, they can be easily opened by you through the bank website. This eliminates endless visits to your bank or other paperwork.
Fixed Deposits offers richer investment over a period of time. Once the Fixed Deposit maturity period ends, you can either choose to withdraw money or auto-renew your account.
Opening a Fixed Deposit has been considered safer than investing in stock markets and shares. All you have to do is just deposit the amount in your bank, and over a period of time you receive a good amount of money. There are several benefits of Fixed Deposits, and the following are worth noting.
You learn how to save money, and once you practise this habit, you will notice the difference it makes. In an FD account, your money is put away for a period of time and you cannot withdraw them prior Fixed Deposit maturity period ends.
When you invest in a Fixed Deposit account, you receive a profitable amount when compared to your savings account.
An FD account acts as a cushion or backup when you require your money. In case of an emergency or future requirements, an FD always promises you of returns.
You can choose a convenient time period depending on your financial status. Interest is payable upon maturity and you can withdraw it for personal use or choose auto-renew option.
When your FD reaches maturity, there are two options you can choose to do. One, auto-renew your account for few years. Most of the banks have an auto-renew option, and they will automatically renew your deposit. This is a good idea if you have plenty of funds, and there is no immediate requirement to spend them.
Banks have auto-termination which transfers the amount to your savings account. This might result in lower interest charges on your FD owing to the volatile nature of the market.
Make an informed decision, and if you have terminated your FD interest rate let it stay in your savings account and accumulate interest.
The decision of renewal and withdrawal of Fixed Deposits is solely left to you. Study the present market and assess your future needs. Renewal is a good choice if you do not intend to keep a tab on your investment for long periods of time.
Do note that a bullish market can result in lower interest charges, and should set the auto-renew swinging for your Fixed Deposits.