Financial experts as well as investors have considered fixed deposits (FD) as the safest and most stable investment options. What makes a fixed deposit stand out from other investment schemes is the guarantee of returns it offers. Even for a minimum amount of FD, an investor can earn pre-calculated returns over a tenure of his choice. An interest rate calculator for FD shows the interest amount an investor can earn on their investment in an FD.
Let us find out more about fixed deposits and the minimum deposit amount for FD in top banks in the country.
Why Invest in Fixed Deposits
An investor is spoiled with choices today when it comes to investment options. However, one must be careful before putting your hard-earned money into a financial tool. For an individual who does not want to take an uncalculated risk on their money, fixed deposits are a safe option. The interest returns on fixed deposit schemes stay untouched by the changes in the prevailing political, economic, or social environment. Therefore, even if the banks cut their FD interest rates after an investor has opened an FD account, the returns would remain the same for the invested money.
Since an investor can pre-determine the returns a fixed deposit investment will fetch using an interest rate calculator for FD, he can plan his future financial goals accordingly. Moreover, the minimum amount of FD is not very huge, and even small investors can earn the benefit of interest returns on their investments.
Investors often choose fixed deposits to invest their surplus cash, which they may get from various sources, like inheritance, gifts, bonuses, incentives, etc. Fixed deposits offer better returns than bank savings accounts but offer the same level of security on the deposited money.
Minimum Deposit Amount for FD in Top Banks
The minimum deposit amount for FD in top banks in the country may vary from one bank to another. While some banks open a fixed deposit account for as low as Rs.1,000, leading banks start their fixed deposits schemes with a minimum amount of FD of Rs.10.000. A minimum deposit of at least Rs.10,000 is required to get a reasonable return on investment.
Tenure of a Fixed Deposit Scheme
Similar to the minimum deposit amount for FD in top banks, the tenure of a fixed deposit scheme may also vary from one bank to another. Top banks offer an investor a more flexible tenure than other banks. Most banks allow a maximum investment tenure of 10 years on fixed deposit schemes, investors can deposit their money for a tenure of their choice for any duration between seven days to 20 years. A longer tenure ensures higher interest returns, especially if the investor opts for a cumulative fixed deposit plan.
Benefits a Fixed Deposit Scheme Offers
Along with the security of the invested amount, an individual can enjoy multiple other benefits by investing in a fixed deposit.
- Fixed deposits as a kind of compulsory saving. Since you cannot withdraw your FD amount time and again like a savings account, it stays invested for the tenure of the FD. It helps you to save money and avoid impulsive spending.
- Although FDs have a fixed tenure, they do not block the investor’s money unconditionally. In the event of an emergency, the depositor can withdraw the FD amount for a nominal interest rate cut.
- The payouts of a fixed deposit scheme are flexible. The investor can choose between cumulative and non-cumulative interest payouts. If he needs financial support in their day-to-day expenses, they can opt for a non-cumulative fixed deposit and receive payments monthly, quarterly, semi-annually, or annually. An investor who wants higher returns can opt for a cumulative FD, where the interest returns are added to the principal invested amount to give interest on interest to the depositor.
Fixed deposits are easy-to-understand investment schemes that do not require the investor to do detailed research about the investment scheme or market conditions. The returns on fixed deposits are straightforward, and anyone can use the interest rate calculator for FD to find out the returns on an FD investment.
Suman(Kul Prasad) Pandit is a graduate from Tribhuvan University with four-year experience in corporate and start-up sectors in UK and USA. Being a responsible & sustainable business enthusiast he is dedicated to business education to solve problems in entrepreneurship and business growth.