The economy is completely down due to the coronavirus pandemic. Investors are suffering a huge loss, especially those who invested during this time. If you have a surplus amount in hand and are looking to invest in stocks and bonds, you should look into the market condition first. Currently, the market is highly unstable, with many businesses slowing their operations and many others completely shutting down. So, according to the experts, investing in unknown markets is a huge risk that you probably should not take, especially in times of crisis.
But this doesn’t mean that you cannot invest. If you know the right investment vehicle, you can hassle-free put your money in. Lately, as the market grapples with the pandemic’s impact, fixed deposit holders can look forward to assured returns as they offer interest at a fixed rate.
With that being said, let’s discuss how investing in a Fixed Deposit is a good idea during the pandemic.
1. Get started with bite-sized contributions
FDs are considered to be the safest of all investment options. That is, you will get the money you are investing in, even in the worst-case scenario. So, this is a great opportunity to save and invest a lump sum with assured security. You can put some funds into a fixed deposit account and earn interest. You can choose your preferred tenure, which ranges from 12 to 60 months or even more. You will earn interest at the rate prevalent on the deposit date. It works in a way that each month you make a new contribution and that each contribution creates a new fixed deposit. So for each deposit, you will earn a separate interest rate. This is one of the best and probably the safest ways to put your money to work in this current situation.
2. Enjoy a stable investment environment
An FD allows you to hedge your investment portfolio against market risks. That means you will earn the highest FD interest rates in a stable investment environment. Although your commodity or equity-linked investments are vulnerable to market fluctuations, you can steer clear of interest and capital loss with a fixed deposit. There are many different types of FDs available, and you can choose one according to your requirements. At present, company FDs are quite popular. While they pose some risks, they are credible, and their stability has been vouched for by several credit rating agencies.
3. Get assured returns at a competitive interest rate
Fixed deposits offer returns at a fixed rate. The interest rate starts from 7% and can go as high as 9% or above, depending on the option you are considering. For example, when you open an FD at a reputable institution, you can earn at a rate of up to 8.05%, when the tenure is at least 4 years or 48 months. And if you are a new customer, you may earn an interest rate of up to 7.80%.
Please discuss the details of the FD with your current banking institution to better understand the possibilities of the investment.
