New Delhi. FD is one of the most popular investment tools in our country. One of the major reasons for this is that people consider it safe. That means they are expected to keep their money safe with definite returns. But it is not. It is true that FD does not have a stock market risk. Yet, there are 5 risks that can harm you. You should be careful about these risks. You have to be vigilant to keep your money safe. Let us know about 5 such major threats related to FD.
The loss of money FD is an investment medium in which your money is deposited with the bank or financial company for a certain time. But you have the option to withdraw your money by making a premature FD. But in that case, you have to pay some fee as fine. At the same time, you will not get interest as much as you get for the entire period. Also, you will not save tax by putting money in tax saving FD before time.
Risk of bank or company sinking
Generally, the keys to sinking a bank or a financial company are very low. Yet, this can happen when the financial crisis comes. If your money is deposited in a bank, the amount up to Rs. 5 lakhs will be secured as per the rules, while you will not get the above money. Deposit Insurance and Credit Guarantee Corporation insures only up to Rs. 5, 00000 on your deposit.
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Inflation decreases returns
As clearly, the return on FD i.e. interest rate fix and pre-fixed. But inflation continues to rise. Therefore, the interest rate on FD should be higher than the inflation rate. Otherwise, the low returns you get will harm you in the form of your inflation. It is understood that the thing you can buy today from Rs. 1000 will not be able to buy tomorrow. Tomorrow he will get you a little expensive.
May losses on investment
The fd’s interest rates have shown a steady decline after the corona crisis. Many banks have drastically cut FD rates. If you choose the investment option again, you will get interest at new rates, which is less. This will be a direct loss. So if you go for investment, put money in a more interest place.
Interest rate is also at risk
As mentioned above, the interest rate on FD remains fixed. It does not decrease in your entire FD period. It is a threat in itself. That is, if you have fd at 4 per cent interest rate and a few months later the same bank increased the FD rate, you will get interest at the old rate.
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