Did you know a Fixed Deposit (FD) can benefit and add value to your investment portfolio? Yes, an FD is one of the reliable investment options that offer attractive interest rates and fixed returns to help you get a regular income. It also allows you to avail of loans against an FD in times of financial emergencies.
Building an investment portfolio is the most crucial part of financial planning. Investors can diversify their investments to build a profitable and balanced portfolio. A Fixed Deposit (FD) is an investment that offers several benefits and helps you build a strong investment portfolio. The benefits of fixed deposit accounts help investors decide on an FD amidst many market-dependent investment options.
What is a Fixed Deposit?
A Fixed Deposit is an investment tool offered by banks and NBFCs, where a lump sum is deposited for a selected tenure at a predetermined interest rate. The rate remains fixed for the chosen period and is not typically linked to market fluctuations.
Top 6 Benefits of a Fixed Deposit
A fixed deposit benefits investors in many ways and allows them to grow their wealth seamlessly. Below are the top six benefits you must know before you book an FD.
1. Flexibility:
Fixed Deposits offer multiple tenure options and payout structures. Investors can choose between cumulative deposits, where interest is compounded and paid at maturity, or non-cumulative deposits, where interest is paid at periodic intervals. Premature withdrawal is generally allowed, subject to applicable penalties.
2. Lower Market Exposure:
A fixed deposit is often preferred by investors who want clarity on returns over a defined tenure. The interest rate is fixed at the time of booking and remains unchanged during the selected period, which helps in planning future cash flows. For individuals who are cautious about market-linked fluctuations, fixed deposits can form a predictable component within a diversified portfolio.
3. Return Visibility:
The interest rate applicable to a Fixed Deposit is determined at the time of booking and remains fixed for the selected tenure. When you open an FD account, you will be informed about the maturity amount you will receive at the end of your tenure. This provides clarity regarding the maturity value at the outset.
4. Loan Facility:
Many institutions offer loans against Fixed Deposits, subject to internal policies. The eligible loan amount may be linked to a percentage of the deposit value, and terms vary by institution.
5. Compounding Interest:
In cumulative Fixed Deposits, interest is periodically compounded and added to the principal, which may enhance the effective yield over time depending on tenure and compounding frequency.
Benefits of Adding Shriram Fixed Deposit to Your Portfolio
Shriram Fixed Deposit offers structured fixed-income returns with defined tenure options. Investors can earn attractive interest rates, flexible tenure along with excellent customer support.
Shriram Fixed Deposit is rated “CRISIL AA+/Watch Positive” by CRISIL Ratings Limited, “[ICRA]AA+ (Stable)” by ICRA and “IND AA+/Stable” by India Ratings and Research.
- Competitive Interest Structure: The interest rate is determined at the time of booking and remains fixed for the selected tenure. Investors may review current rates before investing, as interest rates are subject to change for new deposits.
- Flexible Investment Amount and Tenure: Shriram Fixed Deposit allows investments starting from ₹5,000, with tenure options designed to align with different financial objectives. Investors can use the FD calculator to estimate maturity values based on deposit amount and tenure.
- Additional Interest Benefits: Eligible senior citizens receive an additional 0.50%* p.a., and women depositors receive an additional 0.05%* p.a., subject to applicable terms and conditions.
Investors may consider including Shriram Fixed Deposit as part of a diversified portfolio based on individual financial goals and risk preferences. Reviewing tenure options, payout structures, and current interest rates can help determine suitability.
Key Highlights:
- Fixed Deposits provide return visibility over a selected tenure.
- Investors can choose between cumulative and non-cumulative payout options.
- Loan facilities against deposits may be available, subject to institutional policies.
- Shriram Fixed Deposit offers additional interest benefits for senior citizens and women depositors.
FAQs
What are the benefits of a fixed deposit?
A fixed deposit offers defined tenure options, return visibility, and payout flexibility. Some institutions also provide loan facilities against deposits, subject to applicable terms.
What are the advantages of fixed deposits?
- A fixed deposit is flexible and helps you choose your FD tenure and payout structure at the time of booking.
- FD is reliable, and the interest rates do not typically fluctuate based on market conditions.
What are the benefits of fixed deposit with Shriram Finance?
Shriram Fixed Deposit offers attractive interest rates and flexible tenure. It is rated “CRISIL AA+/Watch Positive” by CRISIL Ratings Limited, “[ICRA]AA+ (Stable)” by ICRA and “IND AA+/Stable” by India Ratings and Research.