How Fixed Deposits help to keep the Indian Economy stable during volatility
November 13, 2020
Our parents and the generation before them have long since crowned Fixed Deposits as the reliable form of saving for retail investors. But did you know that in their own way, Fixed Deposit Accounts help maintain a sense of stability in the economy as well?
Most investment opportunities in the market come with claims of high returns and elaborate promises. But at the end of the day, most of them are subject to the current trends of the market and its unpredictable changes. As a wise financial move, you might even avoid putting all your eggs in one basket and choose to diversify your investments into various avenues. But even so, in the event that a financial downturn hits the economy, most investments run the risk of turning sour.
In moments of financial crisis like this, or even amidst the daily volatility of the economy, there is a desperate need for a factor that remains constant. In the larger picture of the Indian economy, this role is played by Fixed Deposits. With their promise of secure finances and immunity to the chaos of the market trends, Fixed Deposits offer a chance for financial protection, stability and steady growth to every person in the country.
So, let us take a closer look at what makes Fixed Deposits one of the greatest assets of the economy and a blessing for potential investors:
- They are perfect for any investor
The market trends might impact your overall investment returns, but the income generated by your Fixed Deposit will always be steady and reliable.
- 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 finances. But if there is one thing that is common between all investors, it is a pressing need to protect finances at all costs. The best way to achieve that goal is to pool that idle money into a reliable savings option like Fixed Deposit Accounts.
Hence, whichever investment avenues you as an investor might choose to explore, it always pays off to have at least some part of your finances stored away in a Fixed Deposit Account.
- They offer incredible flexibility:
When it comes to investments, we all have our strengths and weaknesses. Some are more savvy 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 for Fixed Deposits range from a period as short as 7 days to as long as 10 years. So, whether your intentions are to meet short-term or long-term financial goals, the flexibility of Fixed Deposits always has a way to make them possible. Moreover, there is no limit to the amount that can be invested in a Fixed Deposit. There are hardly any investment instruments out there that offer this type of flexibility while keeping your money safe from market risks.
- Lessons from last year:
The best indicator of financial tools that can keep your money secure is to go by the investment trends of the country. Not only have Fixed Deposits helped previous generations of Indian households benefit from savings, but they continue to be the leading choice of investment for Indians today.
In the year 2018, Fixed Deposits were the leading investment instrument in India, opted by people across the country. This means that Fixed Deposits outperformed even other popular investment avenues such as Mutual Funds and Equity Trading. According to the data, compared to the 5.5 - 5.9% per annum offered by Mutual Funds and 2.7% offered by Stocks, Fixed Deposits resulted in interests of 6.5% per annum or higher1. No wonder they were and continue to remain the leading choice of investments for people of all generations.
- They 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 are one of the only products in the market that offer interest rates to the tune of 5-6% per annum on your deposits. Whatever your lump sum deposit amount may be, with a Fixed Deposit Account, you are guaranteed to receive good returns on your investment.
- Moreover, financial emergencies can be easily resolved by availing of a loan against the principal amount on your Fixed Deposit. Since banks can offer you Overdraft up to 90% of your principal amount, you can gain access to finances without having to interrupt your Fixed Deposit savings.
They also serve as an excellent savings option for a section of the Indian population that needs it the most: senior citizens. A Fixed Deposit Account often becomes reliable for senior citizens as their post-retirement life begins. In response to this need, Fixed Deposits offer additional interest rates over and above the general rates to senior citizens as well to aid them in their financial efforts.
By the virtue of these 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 are on the lookout for the flexible and profitable Fixed Deposit Account in the market, you can use ICICI Bank’s Fixed Deposit calculator to determine the principal amount, tenure and interest rates perfect 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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