Usually, people invest in mutual funds expecting a little higher returns. But in the quest of earning higher returns, they often forget the risk which comes uninvited with it.  Although mutual funds help earn a higher profit with not much of an effort, they still do bear the risk. Now, whereas there are mutual funds which perform very well, there are still some who tend to underperform. Furthermore, this can turn the underperformance into a loss. However, it is not always that you can earn the desired income from mutual funds constantly.

At times, since people have invested in their hard-earned money, then tend to stick with mutual funds even though it is not good with its performance. The only hope they carry is to expect good market conditions in future. However, this attitude of investors should be changed to have a better financial health. Although investment in mutual funds is safe in comparison to the stock market, there is still some risk involved in it. Now when investing, the investors should examine all investments and then dive into it, as this will avoid some possible risks.

Besides bonds, mutual funds, shares and gold investment, there are investments which are actually safe and provide good returns. Fixed deposit (FD) is one of them. Though the investment is safe, it definitely provides higher returns than a savings account. Being a safe investment, it also provides benefits and schemes which the investors can gain from. Nonetheless, this makes the investment a much-preferred one in India.

Benefits of fixed deposit:

  • Easy access:

Applying for a fixed deposit is not a tough job to do. Since, fixed deposit provides online assessment, applying and managing the FD account is easy. Once you fill the form online, the lender will call you to pick the documents and cheque.

  • Tenure:

Fixed deposit provides its investors with flexible tenure. However, you can select the tenure period which best suits you. You are free to choose the tenure between one to five years. Also, the tenure that you choose determines your interest amount. Thus, it is important to choose it accordingly.

  • Senior citizen fixed deposit:

Being a little aged can benefit you here. Since, financial institutions offer higher interest rate to senior citizen fixed deposit than that of normal FD accounts. Besides this, you can also benefit from various schemes. However, you can also go for investing your pension on a monthly income scheme basis. Furthermore, this will earn you returns every month.

  • Insurance:

When investing in mutual funds, there is no such guaranty of the money you have invested. However, the situation here is different. FD provides you with an insurance worth INR 1 lakh on the invested amount. Thus, this assures the money you have parked safely.

  • FD calculator:

Unlike the other investment options, fixed deposit allows you to calculate the actual amount you will be getting over it. You can use the FD calculator to calculate the interest amount. You can calculate it with the help of three factors- Tenure, invested amount and the interest rate. However, the FD interest rate can vary from each lender. Besides, to estimate the exact amount and to know which amount suits you the best, you can try entering different digits and then calculate it.

Although, fixed deposit might benefit you with low returns compared to that of mutual funds; it can still be a good option than incurring constant losses. However, you can invest in FD and get fixed returns and have an assurance that your hard earned money is safe. Also, you can turn toward NBFCs fixed deposits too as they offer a higher interest than that of banks.