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Fixed deposits

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Know about the best ways to invest your money in right banking products which gives maximum returns of your investments. Fixed deposit is one of the safest product to invest in. Read the document to know what is and why is Fixed deposit good option.

Veröffentlicht in: Wirtschaft & Finanzen, Business
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Fixed deposits

  1. 1.   An investor, or depositor, will deposit a lump-sum cash amount with a bank or equivalent enterprise, for a pre-determined period of time. On this deposit the investor receives interest, at a rate that is also pre-determined. Interest rates depend on the tenure of the FD as well as how the amount of money being deposited. Fixed deposits are popular predominantly because they do not require the investor to deposit large amounts of cash. In the stock market, lucrative shares are expensive to purchase, whereas one create a fixed deposit (or several) with more affordable amounts of money.
  2. 2. WHAT IS EFFECTIVE RETURN IN FD?  Depending on the terms and conditions, the investor may have the option of continually withdrawing the interest amount, or he/ she will receive the amount as a lump-sum at the time of maturity.  In either case, the depositor is guaranteed a certain return on investment. These returns do not usually amount to figures as high as in stock or equity markets, but they are, at least, completely assured.  Another option available to investors is that instead of withdrawing the interest, they may reinvest it in a fixed deposit with higher interest rates. This option to reinvest often yields more returns on the deposit than the investor had originally calculated. This process is known as 'effective return'.
  3. 3. WHY IT IS RIGHT TO INVEST THE MONEY IN FD’S?  Fixed deposits are one of the few investment products that are not subject to market risks and trends, as are stock trading and mutual fund investments.  This makes them one of the safest investment vehicles around, short of stuffing one's money in a mattress. Because they are so removed from the activities of the market, it does not require that investors have an extensive knowledge of the financial world either.
  4. 4. WHAT ARE THE OTHER BENEFITS ?  FD involves blocking your money for a certain period of time, but it can also be broken and its funds can be withdrawn prior to the date of maturity. This feature comes in handy either when better investment options show up, or when there is an urgent need of money.  However, even when the investors break their fixed deposit, they do not lose any of their original investment capital. One might, on occasion, have to forfeit the entire interest amount owing to premature withdrawal, but usually even premature withdrawals attract interest (albeit of a lesser rate than earlier). The investor may also be liable to pay a certain penalty, which is typically of a minimal amount.
  5. 5. IS IT SAFE TO INVEST THE MONEY IN FD’S?  Thus FDs are the ideal investment path for the safer investor. Those who wish to enter the investment waters but do not have the risk appetite needed to play with the big sharks might want to seriously consider stockpiling their money in an FD. ADCB Fixed Deposit makes things easier for you. With flexible tenures and guaranteed interest, ADCB Fixed Deposit makes sure you don't miss out on the little pleasures of life.

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