We live in a world today where most of the youth population does not take heed into savings and protecting a sum of money that they could in the future. Very limited focus and stress has been put on how people can invest and save money to secure it for rainy days ahead. Unfortunately, due to the rising expenses and the problems that people experience on a daily basis, it becomes overwhelming for them to continue saving with no return coming from it.
Fixed deposit is an answer to just the problems that you need to do some smart saving and also develop the habit for saving your money from being used up. The nature of fixed deposit is restricted – people can deposit their money for a certain time period and may receive a certain percentage that would help them with budgeting smarter.
Fixed deposits account offer better rates of return in comparison to a regular savings account for a defined maturity date. Usually, the time for which fixed deposits are kept is 5 years or more. You need not open up a separate account for it, only the frequency of the transaction and the nature of your account will change. Fixed deposits are called term deposits or time deposits in Canada, Australia, New Zealand and the US and called a bond in the UK.
In terms of the benefits, customers could easily avail loans between 80-90% of their deposits. The rate could be 1-2% more than the rate being offered. That way it would allow people to manage their finances and also extract the money after the time has matured.
To open a fixed deposit account, certain particulars will be required. Firstly, control the urge to peak into your fixed account – this has been seen as a major hurdle for a lot of people who have this constant knack of being a spendthrift and have a bad habit for reckless shopping. Secondly, you must prioritize your finances. Budget everything you need to do will only be done once you have taken out enough money prior to make a transaction in the fixed deposit account.
Now, in order to open a fixed deposit account, you must think wisely when choosing the bank for it. Don’t rush into any bank without knowing much about it or comparing it with other banks.