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Fixed Deposit (FD) Explained

Fixed deposit

Understanding FD

What are fixed deposits?

 

A fixed deposit (FD) is a financial instrument offered by banks and non-banking financial companies (NBFCs) in which an individual can deposit a fixed amount of money for a fixed period of time at a fixed rate of interest. FDs are considered to be a safe and secure investment option as they offer fixed returns and the principal amount is usually guaranteed.

 

FDs are also known as term deposits or time deposits. The tenure of an FD can range from a few weeks to several years, and the interest rate is usually higher for longer tenures. FDs can be opened by individuals, corporates, and institutions, and can be denominated in various currencies.

 

 

 

How to open a fixed deposit account?

 

To open a fixed deposit (FD) account, an individual must follow the steps outlined below:

 

 

 

 

 

 

 

It is advisable to consult a financial advisor or a certified financial planner before opening an FD account to understand the various features and benefits of the scheme and to ensure that it is suitable for the individual’s financial goals and circumstances.

 

 

Pros of Fixed Deposit

 

FDs offer several benefits, such as:

 

 

 

 

 

 

Cons of fixed deposit

 

However, FDs also have certain drawbacks, such as:

 

 

 

It is important to carefully evaluate the various FD schemes available in the market and compare them with other investment options before making a decision. It is advisable to consult a financial advisor or a certified financial planner to understand the various risks and potential returns associated with different FD schemes and to make an informed investment decision.

Is Fixed Deposit a good investment option for you?

 

Fixed deposits (FDs) are considered to be a safe and secure investment option, as they offer fixed returns and the principal amount is usually guaranteed. FDs are suitable for investors who have a low risk appetite and are looking for a stable and predictable source of income. FDs are also suitable for investors who are seeking a short-term or medium-term investment option.

 

However, FDs may not be suitable for all investors, as they typically offer lower returns compared to other investment options, such as equities or mutual funds, especially in an environment of rising interest rates. FDs are also not very flexible, as they are locked-in for a fixed period of time and the investor cannot withdraw the money before the maturity date without incurring a penalty.

 

FDs may be suitable for the following types of investors:

 

 

 

 

What is Shriram finance FD?

 

Shriram Finance is a non-banking financial company (NBFC) in India that offers a range of financial products and services, including fixed deposits (FDs).

 

Shriram Finance offers various FD schemes with different tenures, interest rates, and features. The interest rates offered on Shriram Finance FDs may vary based on the type of FD, the tenure, and the amount invested. Shriram Finance FDs are available to both individuals and corporates and can be opened online or at any of the company’s branches.

 

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