The concept of investing money in fixed deposits has been quite popular amongst Indians in general and the middle-class. This popularity is because most individuals prefer to keep their savings in fixed deposit schemes.
Even though the returns are lesser than other investment options, the rate of return is secured; additionally, the money invested by the individuals is safe.
It is the general tendency of middle-class individuals to refrain from taking adverse risks that might harm their overall standard of living or savings. As a result, Indian middle-class individuals always prefer to invest in fixed deposit schemes over any other because the former is a secure way of earning a constant return.
Benefits of Fixed deposit
A fixed deposit is a savings account. It is advantageous if you can discipline yourself to deposit money regularly and then leave it untouched for the term of the FD. It is important to manage your FD in such a way that even after you put the withdrawn money back into fixed deposit next month, it can be left untouched for some time more. There are several benefits from doing this:
Suppose your income rises and you start saving more than earlier. Will your money generate more funds by simply lying in your savings account? Fixed deposits are schemes where an individual can invest their money and gain interest on the same.
Not only that, but the Fixed deposit status in India is high because apart from acquiring an interest, individuals are also able to keep their principal amount safe and secured.
The rates of interest paid on FDs differ on various factors like tenor, amount invested, age of investor, and more. Therefore, you can choose a policy that provides the highest FD rates based on your unique requirements.
How can Fixed deposits boost the economy?
With the growth and expansion of business ventures, there has been a rise in individuals’ overall personal disposable income. If we go by the general trend of these individuals, it is evident that there has been a rise in their average savings with an increase in their disposable income.
As a result, the amount invested by such individuals in fixed deposit accounts has also risen over time.
The rise in the savings of individuals is directly connected with the growth and development of our economy.
As individuals continue to invest more in fixed deposits and as the amounts continue to accumulate, the banks are better positioned to loan this money to industrialists and people in business, therefore investing in the industrial development of our country.
Industrial development generates employment opportunities and ensures the funds lent earns higher returns, offering better interest rate offerings to the fixed deposit investors at a competitive rate.
Therefore, it is evident that the rise in savings with the subsequent investment in fixed deposit accounts is intricately connected with an economic boost. But you also need to things before investing in Fixed deposit. If you don’t then it can trouble you.
Additionally, these two factors form a circular path of income whereby fixed deposit accounts help in more significant investments in specific government projects, which further generate employment and cause growth in the personal disposable income of individuals once again.
Furthermore, the boost in the economy resulting from an increased amount invested in FDs also raises the per capita income of lower-class workers with the growing employment opportunities.
The concept of investing in FDs is beneficial both for individuals in the middle class and the economy to a large extent.