We all love being secure! Be it about our personal life or our financial life, having security and assurity for future is the next thing a human wants after settling down with the family. The need of security or financial stability influences a person to save money for future.
This is the time when the fixed deposit comes into the picture. There are various methods and tools with the help of which a person can save money, but the best option among them is fixed deposit or FD. If you too are looking for a perfect way to save your money, then you have hit the right place as we have listed down all the information about the fixed deposit that you would need to know. To know the meaning, interest rate, method of applying and types of fixed deposit you can continue reading!
What is a fixed deposit and how is it done?
The term itself gives away a lot of hint. By the name fixed deposit, you can understand that it has something to do with fixing your deposits and savings for a certain period of time so that you can withdraw it in future when needed. In other words, the fixed deposit is an account in which people save their earnings for future. Many banks and lending institutions provide an account to the users who can save their money for a fixed period of time, and they get interested over it.
It can also be said that fixed deposit account is a kind of savings account where a person can save his or her savings for a set time period without withdrawing any amount in between. The bank where you have deposited the amount, gives you interest on it. The amount of interest received depends on the time for which the deposits have been done. Longer the time period more will be the interest rate. The Fixed deposit accounts are also known as term deposit or time deposits accounts.
Can you add on to the fixed amount?
By adding on, we mean topping up your amount in the existing fixed deposit account. For instance, you have a fixed deposit account of one lack, and after a year you want to add another one lack to it, the situation will be known as topping up or adding on to the fixed deposit. However, topping up of the amount is not possible in the case of FD rather you can open another account in your name.
Is the early withdrawal of amount possible?
Most of the people who are about to go for fixed deposit have this question. The Fixed deposit account is opened for a certain amount of time, and you can only withdraw the money on the set date. However, if you are withdrawing your amount, then you may lose the interest that you would have received otherwise. The interest amount can be terminated fully or partially depending upon the time of your withdrawal. Moreover, if you have invested your amount in the foreign currency and are withdrawing it before the due date, then you may get the amount even less than the principle amount.
What is the interest rate on fixed deposit and how does bank calculates it?
Just like you have to pay the interest while you have borrowed the loan from the bank, the bank gives you interest when you deposit the amount with them. The rate of interest given on the Fixed deposits is different in different cases. To know about the process by which bank calculates the rate of interest you can read the information given below:
In simple terms, the bank multiplies your deposited amount with the rate of interest on the basis of the months for which you have kept the amount in your bank. Suppose you have deposited $5000 for 18 months at the interest rate of 0.5 percent then the interest amount you will receive will be $37.5.
What are the advantages of investing amount in fixed deposit account?
As it was mentioned in the beginning that the fixed deposit is the best way to save your money for the future, here are some of, the points to validate it. There are various benefits of investing in Fixed deposit, and some of them are listed below:
•High interest rate- you will get a higher rate of interest in the fixed deposit account as compared to the normal savings account. It will help you to add on to your amount even more.
•Risk free- as the amount invested is not related to the market risks, your amount remains safe and hassle free. There is no risk involved I such investment.
•Guaranteed interest- the interest amount on such savings is guaranteed, and you will be entitled to received it under any circumstances except you have not withdrawn it before the due date.
•No lower limit- you do not necessarily have to have a huge amount to make an FD as you can even start the investment from $5000 also. The time period can also be as less as one month.
After reading about the benefits of this type of saving, it can be said that fixed deposit can give you the safest way to secure your future financially.
Who can open a Fixed deposit account?
If you are 18 years or above, then you are all eligible to have an FD. However, this rule can alter from country to country and bank t bank. There are some banks that allow even the 12 years old to make an FD.
How to apply for a Fixed deposit account?
If you are willing to apply for a fixed deposit account, you will have two ways. One is through online, and the other one is from the branch. If you are facing any difficulty, you can go to the help desk at the branch of your bank account.
What happens when your term is up?
When your amount comes to maturity, you will have three ways to treat the amount. One is that you can simply withdraw your principle amount and interest accrued or you can rollover the entire amount for a certain time period. You can also rollover the main amount and withdraw the interest amount.
With this, here is the end of the information on fixed deposit. Hope all your queries have cleared thoroughly!
You don't have to be an experienced entrepreneur to write an effective business plan. If you're only a student, who's going to work in this field in the near future, you probably get similar assignments from your college professors. But how should you write a real business plan, which is based on the assumptions and theoretical knowledge you have for now only? Read more
Investing in Solar solutions for a home is a substantially sizeable investment. If installed properly this investment can increase or decrease the value of property. There are a lot of variables which need to be taken in to consideration. Read more
One of the quickest developing sections of games wagering is live in-diversion wagering. Innovation has made this prevalent, and bettors, including football bettors, are grasping it more constantly. Essentially, sports bookings offer an extensive variety of props in light of the result of a play or the following arrangement of plays. You can make the wager and minutes after the prediction the activity is settled, you have your benefits, and you can make another wager. Read more