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All of this raises the question, are old-school investment options like FD still a good choice for younger investors?\u00a0<\/span><\/p>\n <\/p>\n The answer to this question is a definitive yes, fixed deposits are a great investment option for beginners who want to get started on investing.<\/span><\/p>\n <\/p>\n Let\u2019s quickly take a look at why it might be a great option for beginners:<\/span><\/p>\n <\/p>\n Does not require a lot of expertise:<\/b> Investing in fixed deposits is fairly straightforward and does not need a lot of research and knowledge gathering. You choose an FD with fair returns from an established financial institution and you are set.\u00a0<\/span><\/p>\n <\/p>\n You can start your preferred FD on Kuvera app<\/a> in less than 2 minutes. We are not kidding, try it!<\/span><\/p>\n <\/p>\n <\/p>\n Great place to park funds:<\/b> As a beginner, one of the most important things you need to do before you start investing is to have an emergency fund. Fixed deposits are a great place to park your funds as you can easily break them although this may attract some penalties.\u00a0<\/span><\/p>\n <\/p>\n So, they are also liquid up to a certain extent.\u00a0<\/span><\/p>\n <\/p>\n Guaranteed returns:<\/b> Fixed deposits offer guaranteed returns, which means that the interest rate will not fluctuate and the investment amount is protected. Your money will be safe and will not be affected by market volatility.\u00a0<\/span><\/p>\n <\/p>\n Predictability: <\/b>The return on investment and maturity date are known in advance, allowing for easy financial planning and budgeting.<\/span><\/p>\n <\/p>\n For example, if you are planning to buy a bike or take an international trip, you can easily plan and budget it since you know when your FD will mature and how much amount you will receive from it.\u00a0<\/span><\/p>\n <\/p>\n Low risk: <\/b>This is one of the most attractive factors of investing in FDs, unlike other investment options, your money is always protected and secure in an FD.<\/span> Fixed deposits are considered low-risk investments, making them a suitable option for beginners who are new to investing.\u00a0<\/span><\/p>\n <\/p>\n But all these reasons have remained constant. This means that you can avail these benefits any time you invest in FDs. But there is a very important reason why you should invest in FDs now, i.e in Feb 2023.\u00a0<\/span>This reason is the increasing rates. FD interest rates have been rapidly increasing in the past few months.\u00a0<\/span><\/p>\n <\/p>\n Due to rapid inflation, RBI has kept increasing the repo rates throughout 2022. The rates have increased by 225 basis points since May, reaching 6.25% in FY23. <\/span>This means banks increase the rate of interest for deposits to promote more deposits.\u00a0<\/span><\/p>\n <\/p>\n Most banks in recent months have increased interest rates on their fixed deposit as a result of the RBI’s five consecutive repo rate hikes.\u00a0<\/span><\/p>\n <\/p>\n Currently, the rates are as high as 9.50%. So, Should you invest in FDs now or wait for the rates to go even higher?\u00a0<\/span><\/p>\n <\/p>\n Many experts believe that this might be the peak of the FD interest rates. While there is a chance that the rates might go higher, experts also believe that the increase is not expected to be substantial.<\/span><\/p>\n <\/p>\n So, now might be the best opportunity to invest in FDs and avail the benefit of a high-interest rate.\u00a0<\/span><\/p>\n <\/p>\n You can explore all about FDs and FD rates on <\/span>Kuvera.\u00a0<\/span><\/a><\/p>\n <\/p>\n <\/p>\n Interested in how we think about the markets?<\/em><\/p>\n![\"latest](\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2023\/01\/FD-Banner-9.05-01-1.jpg\")
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