How Fixed Deposits Help Retain Stability During Volatility

Many investment opportunities in the market come with claims of high returns. However, most of them vary as per the trends of the market and its unpredictable changes. Hence, it is advised to avoid putting all your eggs in one basket and choose to diversify your investments. But even so, in the event of a financial downturn, most investments run the risk of turning sour, exposing one’s portfolio to potential losses.

In moments of financial crisis like this, or even amidst the daily volatility of the market, there is a need for reliable investments. One of the investments that fulfils this role is Fixed Deposits. With their promise of secure returns and immunity to the chaos of market fluctuations, Fixed Deposits offer financial protection, stability and steady growth.

Why Should Investors Consider Fixed Deposit for Their Portfolio

Fixed Deposits (FDs) are term deposits designed to provide investors with stability, making them a solid component of any investment portfolio. They assure returns while safeguarding the capital against market volatility.

FDs have advantages like multiple options for tenure, competitive interest rates and minimal risk. There are tax-saving FDs that you can choose to avail tax benefits under Section 80C. You can also opt for premature withdrawals in case of any financial emergency, albeit by paying a penalty.

Let us take a closer look at what makes Fixed Deposits a valuable asset for potential investors.

FDs are suitable for any investor

You will be hard-pressed to find two investors who have the exact same financial goals or investment strategies. Every investor operates with a different mindset and values different aspects of various investments. But if there is one thing that is common to all

investors, it is a need to protect their capital as far as possible. The best way to achieve that goal is to pool idle money into a reliable savings option like a Fixed Deposit.

FDs protect your savings

Market trends might impact your overall investment returns, but the income generated by your Fixed Deposit will always be steady and reliable.

FDs offer flexibility

When it comes to investments, we all have our strengths and weaknesses. Some are savvier with investment opportunities than others, while some have more capital to work with. It is possible to feel left out of certain investment opportunities due to a gap in expertise or not having enough liquidity to get started. With Fixed Deposits, however, there is no such barrier. The tenure of Fixed Deposits ranges from as short as 7 days to as long as 10 years. So, whether your goal is to meet short-term or long-term financial needs, the flexibility of Fixed Deposits helps you achieve it. Moreover, there is no limit to the amount that can be invested in a Fixed Deposit. There are hardly any investment instruments that offer this type of flexibility while keeping your money safe from market risks.

FDs offer high returns and variety of benefits

When the market gets volatile, Fixed Deposits can truly become a safe haven for your savings. But they offer far more than just security. Fixed Deposits give reasonably good returns of 5-6% per annum on your deposits even in a low interest environment. Moreover, financial emergencies can be easily resolved by availing a loan against the principal amount on your Fixed Deposit. Since banks can offer you an overdraft of up to 90% of your FD’s principal amount, you can gain access to funds without having to interrupt your Fixed Deposit savings.

FDs also serve as an excellent savings option for a section of the Indian population that needs financial security the most: senior citizens. A Fixed Deposit often becomes a reliable option for retirees due to its secure returns and the option of getting monthly interest payouts. In response to this need, Fixed Deposits offer higher interest rates to senior citizens.

By the virtue of the above factors, Fixed Deposits continue to be the foundation of the country’s saving habits and a popular means of financial growth. So, if you too want to invest in Fixed Deposits, you can use ICICI Bank’s Fixed Deposit Calculator to determine the FD amount and tenure that is suitable for you. Choose from a tenure ranging from 7 days to 10 years and watch your money grow with guaranteed returns and without any market risks.

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