How Fixed Deposits Can Help You Achieve Your Financial Goals

Millions of Indians include Fixed Deposits (FDs) in their financial planning. While booking an FD, you simply have to deposit a lump sum amount for a fixed tenure at a pre-decided interest rate to enjoy predictable returns., fixed deposits offer a risk-free avenue to grow your savings and are Known for their high stability and security.

Beyond just savings, you can strategically use fixed deposits to fulfil different financial goals. Let’s look at those goals and how FDs help you achieve them.

Goal 1: Creating emergency funds

FD laddering is a highly beneficial strategy for creating emergency funds. In this strategy, you divide your investment into multiple FDs with different maturity dates and interest rates. By spreading the maturity periods, you make sure that part of your investment is always accessible for emergencies while the rest continues to grow.

This method balances the need for urgent cash needs with the goal of earning higher returns on long-term bank deposits.

Goal 2: Planning for short-term goals

Fixed deposit interests offer stability. For short-term goals, this feature makes them a secure alternative to the high-risk nature of market-linked securities. When you allocate funds into an FD, you know that your capital stays safe and grows at a fixed rate, even over short tenures. This approach is useful for objectives like funding an upcoming trip or saving up for a down payment.

Goal 3: Supporting long-term goals

FDs also play an important role in long-term financial planning, such as saving for retirement or your child’s education. Banks generally offer higher interest rates for longer durations, and the power of compounding works best over the long term. In simple words, the longer you hold the deposit, the more you can earn.

So, lock in funds at higher FD rates for a longer timeframe and enjoy a huge corpus to meet your long-term goals.

Goal 4: Proofing your savings against inflation

While known for their safety and predictable returns, one of the criticisms is that FD rates do not always beat inflation. However, with INDIE Fixed Deposits, you can earn an interest rate of up to 7.75% and outpace inflation over time. Offered by IndusInd Bank, you can use INDIE as your go-to online FD app and enjoy multiple benefits like:

• Start an INDIE FD with a minimum deposit of ₹1,000 anytime, anywhere.
• Book different types of FDs, from regular ones to senior citizen fixed deposits.
• Enable auto-sweep facility to earn FD-like rates on your excess bank account balance.
• Pay directly from your FD if your savings account balance runs low.
• Set up multiple payout options, i.e., monthly, quarterly, yearly, etc.

Book your INDIE Fixed Deposit today with a 100% digital process. Enjoy some of the best fixed deposit interest rates and exclusive banking services at your fingertips.

Goal 5: Reducing tax liability

Tax-saving FDs are an ideal option for those who have the goal of reducing tax liability while earning stable returns.

Under section 80C of the Income Tax Act, 1961, investments in tax-saving FDs are eligible for a deduction up to ₹1.5 lakh per annum. Although these FDs come with a lock-in period of five years, they offer the dual benefits of tax savings and interest earnings. Thus, both tax-conscious investors and those seeking high growth can add this FD variant to their portfolios.

Key takeaways

Fixed deposits are a versatile and secure investment option that can play an important role in achieving various financial goals. No matter if you are building an emergency fund, saving for a short-term goal, planning for your retirement, or looking for tax-saving options, FDs can be customised to meet your needs.

Moreover, their predictable returns, ease of online investment, customisable tenure, and tax-saving feature, offer safety and growth that is hard to match. So, add FDs to your financial portfolio today. Take a step towards your financial goals with assurance and peace of mind.

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