5 Fixed Deposits Benefits instead of gold

• Tweet
• Pin It

Hello readers, today we will tell you about the Fixed deposits benefits – Why you should prefer it over gold? over gold. Everyone loves savings, isn’t it. In today’s time, fixed deposits are a wonderful way to make savings and securing your future.

We Indians, especially housewives love our gold. It is almost mandatory in every household to have a little bit of gold, whether it is in the form of an expensive jewellery set or jus a small bangle. In most of the Indian houses, you will find a bit of gold. Some may have purchased it and some might have received it from their ancestors. The importance of gold increases even more on the occasions of marriages and other family functions and religious ceremonies. People consider it auspicious to buy gold on the days like Dhanteras and Akshaya Tritiya. The most common reason people keep gold is because it acts like a life insurance during their bad times. When anyone is going through a financial crisis then gold bails them out of the situation. It was a common practice in old days when there were no equity markets and people did not have much other investment choices.

With time, the thinking of people is also changing. Now, they are exploring other areas of investment to ensure that they get good returns. Without a doubt, gold is still a very good asset but when you sell it in the form of jewellery you tend to lose some of its value. Fixed deposit is the problem to that solution.

Fixed deposit is an account in which you can deposit a certain amount of money for a certain period of time and at the end of that period, the bank in which you have deposited the money pays you a fixed interest along with your deposited money. It is one of the easiest and safest way to get assured and better returns on your money than other risky investments.

Let us take a look at the few Fixed deposits benefits – Why you should prefer it over gold? and why you should invest in them.

SAFE RETURNS

The most important factor while choosing a fixed deposit to invest your money is the returns it will offer. The interest rates on fixed deposits are pre-decided and you already know in advance about how much return you will get. The best part is that it is assured that you will get the returns. Fixed deposits offer higher returns than a normal savings account.

The risk with gold investment is that its prices keep fluctuating depending on the market. One day the price may be high and the very next day it may go down. Suppose the prices are high when you have bought gold and when you are in need and you want to sell your gold, the price suddenly drops. You are left with only two options – either sell it at a loss or wait for it till the prices go higher again. It is hard to predict when will the prices go up again.

COSTS

 
If you keep gold at your home then it is almost sure that a part of u will always be worried about its safety. There will always be a risk of theft. It won’t do any good for your mental health. To avoid that situation the only option you have it is to keep it in a bank locker. Now, if you hire a bank locker then you have to pay its rent also. It yields no good as gold kept in the bank gives no returns. On the contrary, you have to pay extra from your own pocket to ensure its safety.

On the other hand fixed deposits give added returns. It is your choice how you want to withdraw the money. You can do it on a quarterly or yearly basis. Opening fixed deposit account is absolutely free. You don’t need to pay anything for opening or closing a fixed deposit. The only time you will lose a little bit off of interest if you close your account prematurely.

RISK MANAGEMENT

One of the best Fixed deposits benefits – Why you should prefer it over gold? is risk management. Wherever there is an investment, there is an element of risk involved in it. Different types of investment come with a different magnitude of risk with them. Share market promises you high profits but at the same time, they are highly volatile in nature. There are a number of factors that manipulate the share market and it can lead to a loss.

The biggest risk in buying physical gold is its quality. Gold is always rated on the basis of its quality. Not everyone is an expert of gold and it is a high possibility that you are buying low-quality gold on a higher price without being aware of it. Even trusted jewellers sometimes cheat their customers.

Fixed deposits are free from such risks. Credit Guarantee Corporation and Deposit Insurance insure your deposits. FDs are the best option while planning for long-term financial goals for your life.

HELPS IN CRISIS

There may be times when you face a financial crisis and need an urgent amount of money. During such times fixed deposits comes to your rescue. Banks provide you with the option for loans against your fixed deposits. Usually, most banks give loans ranging from 60% to 90% of the deposits. In a special case, the banks can give you higher amount but in that case, you have to pay high-interest rates.

FLEXIBILITY

Another point in the list of Fixed deposits benefits – Why you should prefer it over gold?. Fixed deposits give you flexibility on how to manage your money in regard to time. They come with different tenure duration. It usually ranges from 7 day period up to 10 years. Different banks have different tenure criteria and interest rates. You can go for fixed deposits in any of the banks regardless of whether you have a bank account or not. You can compare the different schemes and choose what suits you best.

So this was our take on Fixed deposits benefits – Why you should prefer it over gold?. Hope it was helpful to you.

• Tweet
• Pin It