Many investment options are available in the market, but a fixed deposit always sits at the top of the priority list for various reasons. Surely you can choose other options to invest in, which can even promise better returns, but will you get the same security with them as you get in a fixed deposit? A financial institution that offers the highest FD rates in India ensures an excellent return on your fixed deposits with no worries of loss.
A common myth regarding fixed deposits is that they don’t offer much return. However, data by Statista Research Department shows the growth of the Indian fixed deposit market has been very consistent in the past few years. It means people tend to invest in fixed deposits despite popular beliefs; thus, if you are wondering why then look at the following benefits of a fixed deposit.
One of the main reasons why fixed deposits are so popular in India is their security. Fixed deposits are considered one of the safest investments due to non-existent market risks. While different investment options depend on the market growth and downfall, fixed deposits are independent entities not affected by the market downfall.
The interest rate applicable when creating an FD will remain constant until maturity. If you decide to renew the deposit, the interest rates might change; in such cases, a new interest rate applies.
Fixed Rate on Maturity
Before opening a fixed deposit, you can easily use an online FD calculator to estimate how much you will get on maturity. By looking at the highest FD rates in India, which can be over 7%, you can choose the best fit for your needs. By this, you can guarantee a secure payout on maturity. While other investment options like mutual funds highly depend on the share market, fixed deposits are hassle-free.
The withdrawal policies of fixed deposits are fairly easy. They are not as complicated as other investment options. Although many banks and NBFCs do not pay interest on premature withdrawals, you can still withdraw your capital anytime, with a click. FDs can be directly linked to your savings/salary accounts; the amount will be directly credited. Fixed deposits can easily serve as your short-term investment since you can withdraw them anytime, according to your convenience.
Compound interest rates are applicable on fixed deposits, and you can calculate even monthly interest for 1 lakh fixed deposit easily with an online calculator. While FD interest rates vary depending on various factors, the monthly interest for a 1 Lakh fixed deposit is calculated via simple interest calculation. The formula for that is:
P+(P x Rx T/100)
- P= The principal amount
- R= The rate of interest
- T= Tenure or the Term period
You’ll get what the estimate shows you on maturity since no hidden charges are applied to fixed deposits. The interest on the principal is the only type of return available on fixed deposits, but since they are guaranteed, there is no risk associated with them.
Many people opt for fixed deposits as a secured source of income. If you opt for a monthly interest payout on your fixed deposits, you can easily avail a stable source of monthly income. For example, if you have a heavy lump sum, you can choose a provider with the highest FD rates in India and select the monthly interest payment option.
When paid monthly, a simple interest rate formula is applicable on fixed deposits, which can help to get the interest regularly. It can be an excellent retirement option if you have a large principal amount. Since fixed deposits are renewable, you can keep renewing the principal amount. You can also change the service provided based on the market rates applicable to the amount.
Fixed deposits are a convenient, safe, and reliable option for short-term and long-term goals. You can even redeem these during emergencies. The FD market in India is competitive so you can choose from the highest FD rates in India based on your preferences. Such a lending institution is Muthoot Capital which offers flexible interest rates on FDs and the highest rate of up to 8.38%.
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