Investing in a fixed deposit has forever been a popular option for Indian investors. They provide optimum security and offer decent returns when compared to other risky investment instruments.
However, not all fixed deposit accounts offer inflation-adjusted returns. To get the highest FD interest rates, you might have to look at corporate FDs like the ones offered by PNB Housing Finance.
Here are the top reasons why a fixed deposit is a practical investment tool.
High Returns
Fixed Deposit interest rates start from 2.90% and go up to 6.70%. FD rates depend on the policy rates announced by the RBI at periodic intervals. If you take inflation into account, you will observe that most fixed deposits give negative returns.
A better choice is to choose a PNB Housing Finance FD, which gives you not only the highest FD interest rates but also cumulative and non-cumulative options. For example, if you invest in a 120-months' cumulative fixed deposit, the yield to maturity can go up to 9.13%. Alternatively, you may choose the non-cumulative option and withdraw interest monthly, quarterly, half-yearly, or annually.
Save Money For Future Goals
You work hard to earn money and use that money to fulfil the various goals of life. A fixed deposit, like PNB Housing Finance FD, enables you to increase your unutilized money and reach toward your goals faster. However, you need to ensure that there is enough money in your account to meet short-term financial commitments.
Although fixed deposits are liquid, which means you may withdraw the amount whenever you want, it is better not to exercise that option, as the financial institution may charge a penalty for withdrawing prematurely. Conversely, you can create several PNB Housing Finance FDs spread across many durations, as it would supply you with cash at fixed intervals.
Optimal Safety
The driving force behind the popularity of fixed deposits is the security it offers. Fixed deposits, unlike investments in mutual funds or the stock market, are considered risk-free. However, when you create an FD account in a bank, an amount of up to INR 5 lakh is insured by the DICGC. Hence, if anything negative happens, an investor will get only up to INR 5 lakh, irrespective of the amount they invested.
On the contrary, a corporate FD, such as PNB Housing Finance FD, does not have such limitations. Generally, corporate FDs are rated by CRISIL, which evaluates various parameters like the company's balance sheet, financial track record, and company background to assign a rating. A rating of FAA+ and above is treated as the benchmark. PNB Housing Finance FDs are CRISIL FAA+ rated, and hence offer optimal security without any limitations.
Tax-Saving
Besides getting the highest FD interest rates, PNB Housing Finance FDs enable you to save taxes of up to INR 5,000 every year.
Generally, financial institutions deduct TDS, or Tax Deducted at Source when you earn above a particular amount as interest. If your total interest income from a PNB Housing Finance FD is below INR 5,000, you do not need to sacrifice a penny as tax.
Loan Against FD
You can avail a loan against FD when you require cash urgently. Financial institutions like PNB Housing Finance allow you to pledge your FD certificate and receive up to 75% of the principal amount as a loan. The interest rate will be 1.5% to 2% higher than the prevailing highest FD interest rates.
Conclusion
Fixed deposits, like PNB Housing Finance FD, offer you unparalleled flexibility to earn high returns safely. With the highest FD interest rates, a click away now is the best time to open an FD account.
