How can Fixed Deposits help you during financial emergencies?

For people new to the world of investments and investors who like to stay cautious, savings are typically synonymous with Fixed Deposits. FDs are a popular choice of investment among individuals as they are safe. This is especially true for investors who prefer to invest their funds for the long term.

A Fixed Deposit Account helps in a financial emergency. Here are the various advantages FDs offer when you choose them to overcome your financial difficulties:

Safe

If you are uneasy about market volatility, FDs can be one of the safer investment options available. When you opt for FDs, you also need not worry about changes in the FD interest rates. This is because the rate is fixed for the tenure of the deposit. Hence, you receive assured returns on your investment.

Easy to withdraw

FDs usually offer some financial flexibility. In case of an emergency, you can withdraw your deposit prematurely. The money then gets credited to your Savings Account instantly. While your bank may charge a penalty for this, you can usually access the funds you deposit in an FD whenever required.

Multiple tenures

When opening an FD, banks usually offer multipletenure options. This ranges from seven days and up to five years or more. So, understand your financial needs and select a tenure that suits your goals. The FD rates in India also vary based on tenure. Usually, the longer the term of the FD, the higher the interest rate on your FD. However, this may vary across banks. 

Easy to open

Opening an FD is easy these days. You need not visit your bank. It also does not involve any cumbersome processes or paperwork. With technological advancements in the world of banking, you can conveniently open your FD Account from anywhere and at any time in just a few minutes. Use aBanking app and open your FD online without hassle. Choose an amount based on your financial goal.

You can also customise the tenure of your FD based on your convenience and select the preferred maturity instructions.

Insured

All Bank deposits are insured up to a maximum of Rs. 5 lakh by the DICGC. This applies to your FD, too.  Hence, when you use Online Banking to open an FD, this feature adds another layer of safety to it. 

Conclusion

Having an FD can be helpful when you face an emergency. Opening an FD also ensures you do not spend the money on unnecessary needs. It can offer assurance during emergencies. It is also liquid and offers multiple other benefits, like assured returns due to fixed FD rates. Now that you know the advantages, you can open one to realise its potential to the maximum.