5 Big benefits of FD: By starting fixed deposits early, you can benefit from higher returns, tax savings and financial security in the long run. If you are planning to get an FD, then definitely get information about the interest rates offered by various banks in the market on 1-2 year FDs so that you can take the right decision.
5 Big benefits of FD: If you want to grow your savings with safe and assured returns, then Fixed Deposit (FD) can be a great option. The sooner you invest in FD, the more benefits you will get. FD not only strengthens your financial position but it also develops the habit of saving in the long term. Let us know what can be the benefits of starting FD early.
1. Promotes the habit of saving
Investing in fixed deposits makes you get into the habit of keeping a certain part of your earnings aside. It strengthens your financial discipline and provides financial security in the future. This habit of saving regularly helps in achieving bigger goals in the future.
2. You get more benefit of compound interest
A big advantage of investing in FD is the benefit of compound interest. The sooner you start investing, the longer period you will get interest. For example, if you make an FD at the beginning of your career, you will get good returns till maturity, whereas the benefit of FD made late will be limited.
3. Stable and risk-free returns
Compared to other investment options, FD is not affected by market risk. It comes with a fixed interest rate, which gives stable and reliable returns to the investor. That is why it is a better option for those who want to increase their capital without any risk.
4. Helpful in emergency situations
Financial emergencies can arise at any time in life, and in such a situation FD can work as a safe backup for you. Banks provide loan facility against FD so that you can get money when needed without breaking your FD.
5. Tax saving benefits
By investing in tax saving FDs, you can avail tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. If you invest in FDs for a long time, this savings can turn into a large amount in the future and can be used for other financial goals.
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