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2 mins Read | 2 Years Ago

Fixed Deposit vs Savings Account: Where should You Invest

Fixed Deposit vs Savings Account: Where should one choose to invest


Every person aims at achieving their life goals, and to meet them, they might need significant funds. Therefore, saving money is crucial. Furthermore, the accumulated funds can help in case of various unforeseen situations.

Saving money on a regular basis is a good option, but only savings cannot help you a lot as it can’t earn any returns. Such funds can lose their value. However, depositing this money in different avenues can allow you to earn good returns.

What are the options where you can deposit your money?

  • Fixed Deposits (FDs)

  • Savings Accounts

A Savings Account or A Fixed Deposit- Which to Choose?

fixed deposit and a savings account are two options that allow you to deposit your money. They both enable you to earn returns based on the money deposited.

But both deposit options serve different purposes. Savings accounts are beneficial for safely saving money and making regular transactions. Fixed deposits are crucial for achieving financial goals. Thus, it is important to opt for both as they can help you meet different financial requirements.

With that in mind, let’s understand both of them-

Fixed Deposits

Fixed deposits are one of the most preferred investment options of many as they are safe and can provide stable returns. Here are some of the benefits of fixed deposits

  • It Provides Assured Returns

One of the reasons why many opt for fixed deposits is because they are a safe investment product that provides assured returns.

  • Its Tenure is Flexible

ICICI Bank offers customers a wide range of tenure from 7 days to 10 years. Thus, customers can plan their financial goals based on the investment term.

  • Senior Citizens Can Get Additional 0.50% Interest Rate

Senior citizens are provided with an additional 0.50% interest rate that is over and above the regular FD interest rates.

  • Automatic Renewal Facility

You can opt for auto renewal mode when opening a fixed deposit. When you opt for this mode, your FD will be renewed for the same tenure on the maturity date. Thus, there will be no interest loss.

  • Overdraft Against FD- Up to 90% on Principal and Accrued Interest

Customers can also avail overdraft against FD.

Savings Accounts

A savings account is a bank account that allows customers to safely park their money. Furthermore, savings account interest rate helps in generating returns on the balance maintained. Most people enter the financial landscape by opening a savings account. It can be used for various purposes, such as to deposit salary, accumulate funds for an emergency, etc.

Here are some of the reasons why a savings account is important-

  • A Safe Place to Park Funds

The funds deposited in a savings account stay there safely. This is one of the reasons why many choose to park their money in a savings account.

  • It Provides Easy Access to the Funds

It is very easy to access your funds when you deposit them in a savings account. You can withdraw them via ATM services. You can also transfer funds from one account to another easily. Therefore, this benefit can help you in case of an emergency.

  • Make Payments Easily

You can use your savings account to make regular transactions, bill payments, etc. easily.

A fixed deposit as well as a savings account are essential for managing your money efficiently. Hence, it is wise to deposit your funds in both of them.

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