There are times when economic turmoil, or financial crises, or in simpler words, the need for money in an emergency arises in one’s life. In today’s inherent uncertainty, one never knows when they may lose their jobs, or face a medical emergency at home. All such eventualities halt regular income and at the same time, demand high cash outflow.
One should always be financially prepared to address such turmoil and one of the best tools available today is Fixed Deposits.
What is Fixed Deposits?
Fixed Deposit (FD) is the surplus money we put into the bank or financial institution, which we do not need currently but would like to save for future needs. Additionally, it also generates interest income and hence offers the opportunity to grow wealth. FD money can be used to meet planned expenses like marriage, buying a home, family function, higher education or to address unexpected events like a medical emergency.
Now that you know what fixed deposits are, let us look at how it can save you from economic turmoil:
Power of Compounding
Fixed deposits allow money growth at a consistent interest rate yearly, depending upon tenure one chooses, which can typically range from 7 days to 10 years. To understand the compounding nature of FD, you can use an FD calculator available online. Please check FD interest rates to get an idea about the future value of the money that you invest today. Not only that, investing in FDs can be a more efficient approach than just keeping money in your savings account.
Accessibility to Funds During Emergencies
The best part of investing in fixed deposits is that one can be allowed to use these funds any time. You can withdraw money by breaking the deposit in case of emergency, however with lesser interest. If it is maintained for the entire tenure, predefined FD interest rates are applied. More efficient way to manage an emergency is to take a loan against FD. It simplifies loan application process and offers access to funds quickly. You can manage any financial crisis or emergency with minimum efforts, time and expenses.
Feel Safe with Assured Returns
Returns on fixed deposits are assured, irrespective of any fluctuation in the market. Investments in equity market can make or ruin the fortune, but FDs will always give the anticipated returns. Top credit rated institutions like NBFCs offers high quality Fixed deposits, which generally pays about 0.5% to 1% higher yields than banks. FD calculators can help you compare returns that you can avail from investing in different types of fixed deposits.
Savings Today, Secured Tomorrow
If money is kept in a savings account, you will be tempted to use it for various expenses, which could be avoided otherwise. When you invest in FDs, you are less likely to break the deposit for random expenses such as entertainment or shopping. Hence, you ensure that there is some money saved for emergencies that you might face in the future. In the long run, the habit of savings can generate a sizable amount of wealth. You can calculate the anticipated returns easily by using an FD calculator online and be perfectly prepared to meet emergency expenses.
Passive Income Keeps You Confident
Finally, fixed deposits can give you immense financial confidence! Every single day, your FD will continue to grow seamlessly. Once you create the deposit, it requires little attention to grow it. No other instrument gives guaranteed returns as fixed deposits do. You can avail a fixed deposit with NBFCS online with convenience and start ensuring consistent growth of funds right away.