Fixed Deposit Rates Have Fallen. What Should Investors Do?

Investing your hard earned money instead of saving it is any day a better option as you will be able to earn profits on your investment and end up getting more money than the original amount. People usually choose to invest any extra income that they might come across. One can come across some surplus funds either from a business profit or a salary hike or even from other investments as well.Fixed Deposit Rates

When it comes to investments people usually opt for fixed deposits as it is considered as safe investment options. Now investing in a fixed deposit is great as it offers you with high-interest rates as well as involves less risk. The interest offered on a fixed deposit account is generally fixed. Fixed deposit interest rates don’t depend upon the market conditions and hence your keep receiving fixed rate of interest on your investment and check your maturity amount through FD calculator.

Fixed deposits are known as one-time investments where you have to invest all your funds at a single time. Many people prefer investing in fixed deposits than mutual funds. Investments like mutual funds depend upon the market conditions which make them risky.

Another advantage of investing in the fixed deposit is that you can avail the overdraft facility. Banks usually restrict you to withdraw funds from your fixed deposit. In such a case overdraft facility can help you. If you have an emergency and need some funds urgently you can take up to 90% of your invested amount from your fixed deposit. Also, banks provide your fixed deposit an insurance up to INR 1 lakh. This gives your funds security. Having all this makes investing in fixed deposits a better option.

But after the demonetization, the government has reduced the interest rates on investments as well as loans. This can be a great news if one is opting for loans but it definitely is not a great new for the people who are planning an investment. Though investment is fixed deposits is great this news can make anyone rethink about the investment options.

But you can still go for investing in fixed deposits here is how:

  • Senior citizen fixed deposit:

You can invest in senior citizen fixed deposit as this will help you earn higher interest rates. Banks offer higher interest rates on senior citizen fixed deposit. These rates are higher than the normal fixed deposit. The government has announced to increase the interest rates on senior citizen fixed deposit. If you are a senior citizen then you can definitely benefit with this. You can also invest your funds in senior citizen fixed deposit if you have any senior citizen in your family.

  • NBFCs fixed deposits:

Banks are not the only one who offer you with fixed deposits Non-Banking Financial Companies (NBFC) also offer fixed deposit investments. They offer you with a higher interest rate than the bank. If you still wish to earn higher interest rates you can switch from banks fixed deposit to NBFCs.

  • Other investment options:

If you are still thinking whether you should invest in fixed deposits or not you can also look out for some other investment options. You can go for investing in shares or mutual funds as they offer you with higher returns. If you wish you can also invest in gold. Purchasing gold can be a good option as this can give you higher returns in future. But since this type of investment is highly volatile and highly influenced by the current market rates, it is advised that you do not go for this type of investments.

Everyone expects that you get good returns on your investments but there is no point in investing your money somewhere where you might end up losing it. Therefore, investments should be done only after you have carefully considered all your options.