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Low Risk Investments You Need To Be Aware Of
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First time investors can tend to be wary of investing in the financial market as most investments do pose a high risk. Opting for such high risk investments may not be beneficial for them. Hence one of the best options available for any new investor is fixed deposits. FD’s are one of the few investments which offer a relatively low risk investment for individuals. The features of this type of an investment are:
This type of an investment enables the investor to get a higher rate of interest on the funds they have invested.
Such an investment allows the investor to only deposit an amount once on which interest is calculated.
If the interest amount each year is higher than ten thousand rupees, TDS is charged on the interest earned.
What makes a fixed deposit an ideal investment option is the guarantee of returns. Being a safe and low risk investment option, one can expect to get interest on the amount they have invested with a financial institution.
Currently most financial institutions offer a variety of fixed deposits to meet the needs to investors. Some of the most popular types of FD’s are:
This is a regular FD which is offered to all investors. Such an investment offers a duration period from ten days to ten years. The interest rate is decided in advance and remains fixed during the entire duration of the investment.
This type of an FD was designed to allow investors to invest an amount for special periods. Such an FD allows individuals to deposit amounts for periods such as 190, 290, 390 days, etc. What makes it different from a standard FD is the fact that the interest rate offered is comparatively higher.
Tax Saving FD
Most FDs allow the investor the option to withdraw their deposited amount at any point of time. In the case of the Tax Saving Fixed Deposit, the deposited amount is locked in for a minimum 5 years to 10 years. Since interest incurred which is higher than ten thousand does have TDS deducted from it, the tax saving fixed deposit helps the investor avoid this charge.
Floating Rate FD
In most fixed deposits, even the interest rate charged remains fixed. In the case of floating rate FDs the interest is not fixed and changes according to the changes in the reference rate. This type of FD allows the investor to take advantage of the potential changes in the interest.
As a first time investor, a fixed deposit is an ideal safe investment option which will guarantee you high returns.
Author Bio :
An experienced writer on finance topics, the author articulates of investment choices such as fixed deposit products in India & recurring deposit schemes. She writes about a variety of topics including the benefits of recurring & tax saving fixed deposit and how to make the right investment choice.
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