Fixed Deposit or Savings Account: A Quick Guide!

by | Mar 29, 2018 | Financial Featured

When it comes to relying on an investment scheme in India, one should always consider those that offer maximum return on investment or ROI along with good liquidity. One of the better investment vehicles available to use these days are FD (Fixed Deposit) Schemes which not only offer great ROI and interest payouts but even amazing liquidity.

Many people keep their money stashed in a bank savings account and keep earning 4% interest rate which is not wise when there is a higher interest giving investment option available in the form of FDs.

If you are confused between choosing a fixed deposit or a savings account, let’s provide you some quick insights.

Fixed deposit features at a glance

  • Fixed deposit schemes provide various options when it comes to tenors with as little as seven days to 12 months. They offer cumulative and non-cumulative FDs interest payout. NBFCs may have a longer tenor and may not offer a tenor as little as 7 days though!
  • The interest payout of an FD is higher than that of a savings account.
  • You can expect to grab up to 8.20% interest payout or ROI on your fixed deposit investment depending upon your age and membership with the lender.
  • FDs also come with higher safety and stability ratings meaning there are no threats to the locked down amount.
  • If you want to avail some amount during an emergency, you can easily close your fixed deposit account and get the amount to cover your needs.
  • An FD may also offer you avail a loan against the deposited amount which is considered a security deposit to cover your needs. By this, your investment wealth keeps accumulating the desired ROI after the maturity

Savings account features at a glance

  • The savings account of a bank and other financial institutes offer only around 4-5% interest rate based payout which means your money won’t grow quickly.
  • There is no limit on the days a person needs to keep investing in a savings account.
  • You need not keep a particular amount to earn interest in most cases.
  • However, it is now mandatory to keep some amount for sure in a saving account as the minimum amount else you are charged some penalty.
  • Even though your lender is offering you a higher interest rate saving accounts, you must read and go through the minute details of the fine prints.

The Bottom Line

Thus, when it comes to fixed deposit interest rate, it offers you the assurance of the interest payment along with the ROI, making it a sure to go thing! On the other hand, a bank’s savings account is nothing but an option to keep your money and earn only 4-5% interest payment and not see your money grow more! Thus, if you are looking for a lucrative investment vehicle with a surety of ROI and safety, FD is what you should apply online! All the best!

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