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Security and convenience: Why every investor needs a term deposit
Key Takeaways
A term deposit is a fixed-term investment with guaranteed returns.
- Adding a term deposit to your investment portfolio offers benefits like stability, steady returns, and more.
- Make sure to choose an option like a Fixed Deposit by IDFC FIRST Bank for a hassle-free term deposit.
Are you considering diversifying your investment portfolio with a stable avenue that generates guaranteed returns? If yes, term deposits are the way to go!
In the dynamic world of investing, putting all your eggs in one basket is never wise. Instead, spreading your money across different investments allows it to grow at different rates while protecting you from market volatility.
Options like mutual funds and stocks enrich your investment portfolio with high risks and returns. However, it is also important to invest in avenues with lower risks and a steady return on investment.
This is why you need a term deposit in your portfolio. Find out what a term deposit is, how it benefits you, and why you should choose the IDFC FIRST Bank Fixed Deposit (FD) to grow your money.
What is a term deposit?
A term deposit is an investment option where you lock a lump sum amount with a bank for a certain tenure at a fixed interest rate. Upon maturity, you receive the original sum you invested and the interest accumulated during the deposit's tenure.
When you invest your money in a term deposit, it is set aside for the tenure of the investment. This means you cannot access the funds without paying a penalty for premature withdrawal. Due to this, term deposits have flexible time periods to choose from based on your financial goals. These tenures can range from as little as seven days to as long as ten years.
Adding a term deposit to your investment portfolio is a great way to ensure that your money keeps growing through the power of compounding, regardless of market fluctuations. Banks offer two types of term deposits that you can choose from -
1. Fixed deposits (FD) -
These are traditional term deposits in which you lock in your money and allow it to grow based on the interest rate and time.
2. Recurring deposits (RD) -
These allow you to deposit a fixed amount periodically instead of a lump sum at the beginning. This means the principal amount you receive interest on keeps increasing over time.
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What are the benefits of a term deposit?
If you are still on the fence about diversifying your investment portfolio with a term deposit, here are some benefits that might change your mind -
1. Greater return on investment -
What sets apart term deposits from your savings account are their higher rates of interest. This means that you receive a greater return on investment by putting your money in term deposits instead of letting it sit idle in your bank account.
2. Safe investment option -
Term deposits are one of the safest investment options for growing your money, especially if the market is volatile. While avenues such as mutual funds and stocks can fluctuate, adding a term deposit to your investment portfolio provides a stable option.
3. Investment portfolio diversification -
A good investment portfolio mixes volatile and stable options, depending on your risk appetite. Term deposits are an easy way of diversifying your portfolio with some stability.
4. Better financial planning -
Setting aside money in a term deposit allows it to grow and remain untouched for some time. This helps you control your spending and plan for long-term financial goals.
5. Flexible payouts -
Financial institutions such as IDFC FIRST Bank offer flexible payouts on their fixed deposits that allow you to collect interest monthly, quarterly, or upon maturity. This way, you can grow your money while choosing an option that supports your cash flow needs.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.
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