Best places to invest your savings

Money that is regarded as savings is often invested in a low risk, interest-producing account, rather than into elevated risk investments. Even though there is a prospect for larger returns with some investments, the plan behind savings is to let the money to grow gradually with little or no coupled with risk. The arrival of online banking has improved the array and convenience of savings accounts and vehicles. Though there are different kinds of accounts available online, fixed deposit account is the ideal one to invest your money as it offers you higher fixed deposit rates than any other accounts in the bank network.

Fixed deposits and Debentures are two dissimilar ways of investing money that carries higher fixed deposit rates. A debenture, which is an unsecured bond, is not sponsored by a physical asset or security. At times, debentures are issued with requirements that permit the bond holder to swap the debenture for the stock of a company. Non-exchangeable debentures are non-collateral bonds that cannot be swapped to company stock or equity. These Non-exchangeable debentures generally boast higher interest rates of interest similar to fixed deposit rates than convertible debentures.

A fixed deposit is an agreement with a bank where a depositor deposits money in the bank and is provided with higher fixed deposit rates and paid an expected fixed income. The amount of turnover or higher fixed deposit rates paid on the investment is permanent and will not decrease or increase at any time despite variations in the rate of interest. The fixed deposit rates typically offered by fixed deposits are low when compared to other investment forms since they are low-risk investments. Fixed deposits naturally have maturities that range from two weeks to five years. Fixed deposits cannot be cashed before its maturity period. In another sense, money cannot be taken out of the deposit for any cause until the time-period of the deposit has perished.

Summary: If the cash is withdrawn from the fixed deposit account before its maturity period, then the bank can levy a premature withdrawal fine or charge. A very familiar pattern of a fixed deposit account is a certificate of deposit.

Facts about bank FD interest rates

Bank FD interest rates are the interest rates that are being paid to the depositor by a bank for the principal amount invested in the fixed deposit. Normally, bank FD interest rates are less than the interest rates paid by the private financial institutions on fixed deposits. However, you have a great security for your sum deposited in fixed deposit scheme of the banks rather than depositing in private financial institutions. This is for the reason that if the banks go insolvent, they will return your deposited amount with accrued interest, whereas, this is not possible in case of private financial institutions. Also, the amount invested in the banks’ fixed deposit fetches you a tax deduction under the section 80G.

Summary: Though the bank FD interest rates are less than the interest rates offered by the private financial institutions, it is safe to deposit your hard-earned money in bank fixed deposit.