Are Fixed Deposits Still Favorable Post Reduction in Interest Rates?

Investing surplus funds- business profits, salary hike or investment returns is always better than saving as there is no scope of earning from savings. Fixed deposits are highly favored investment options because of their safety and assured returns. The overdraft facility can be availed instead of breaking an FD prematurely to withdraw up to 90% of the deposited amount during emergencies.

FDs are less volatile than mutual funds as they don’t depend on market conditions.

After demonetization, interest rates have gone down for both FDs and loans. While decreasing interest rates on loans is good news, lower interest rates on FDs is not.

However, investing on an FD is still a good choice. Here’s why-

Higher Interest Rate on Senior Citizen FDs

If you have a senior citizen in your family, you can easily invest your funds in such an FD as they provide higher returns. Know the best investment ideas for individuals nearing retirement age.

Investing in an FD with an NBFC

Apart from banks, Non-Banking Financial Companies offer attractive interest rates on Fixed Deposits. Not only is investing in FDs with an NBFC safe, you also stand to benefit by earning higher returns.

Other Alternatives

Apart from FDs, you can explore investing in mutual funds, shares, or gold. However, it needs to be mentioned here that these options are highly volatile.

Read More about why Fixed Deposit Rates Have Fallen