A winning financial strategy would be one that ensures both growth and security. If you're looking for an investment that is safe and stable yet earns higher returns, then Fixed Deposits are what you have been searching for all along. In a world of volatile markets and unpredictable returns, FDs offer a beacon of stability and reliability. With minimal risk and attractive interest rates, FDs have rightfully earned their place in a well-balanced financial portfolio.
FDs are like the reliable backbone of any well-balanced financial strategy. It's time to decode the magic behind FDs and understand why they are a must-have in your investment arsenal. From offering a lower-risk avenue with attractive returns to providing a hedge against market fluctuations, FDs strike the perfect harmony between risk and reward. But that's not all! We'll also dive into how including FDs in your financial portfolio brings diversity and stability to your investment mix.
Key Highlights
- Fixed Deposits offer stable and predictable returns, ensuring your money grows consistently.
- FDs offer deductions under Section 80C of the Income Tax Act, reducing tax liability.
- Including FDs in your financial portfolio adds diversification, reducing overall portfolio risk.
- In times of emergencies, you can access funds through premature withdrawal or loan against FD.
What is a financial portfolio?
A financial portfolio is a strategic collection of your investments and assets, meticulously designed to achieve your long-term financial goals. Think of it as a tailor-made blueprint that brings together a diverse range of financial instruments, such as stocks, bonds, mutual funds, real estate, and more. Just like a chef crafting the perfect recipe, you carefully select and balance each ingredient to create a harmonious mix that aligns with your risk tolerance and objectives. The goal of this artful curation is to maximize returns while minimizing risks, ensuring your financial security and prosperity over time. Your financial portfolio is your personalized roadmap to navigate the ever-changing financial landscape and attain your dreams with confidence and foresight.
What are the important factors in a financial portfolio?
A well-balanced financial portfolio requires careful consideration of various factors. Diversification is the key, to spreading your investments across different assets to reduce risk and maximize returns. A smart mix of equities, bonds, real estate, and other assets creates a strong foundation. But wait, there's a secret ingredient that can elevate your portfolio to new heights - Fixed Deposits (FDs)! With their reliability, stability, and attractive returns, including FDs in your financial canvas brings harmony and security. FDs add a touch of certainty, shielding your capital from market fluctuations while providing steady growth.
Factors to consider when planning your financial portfolio
When you build your financial portfolio, you must ensure that you make investments according to your requirements. Here are the factors that you should consider.
1. Financial Goals
You should first define the financial goals for which you wish to invest. They can be short-term, medium-term, or long-term. You may want to save and invest for buying a car or a house, for children's education, travelling, emergency funds, marriage, or simply wealth creation.
2. Risk appetite
Market risks tops the list o concern for an investor. Your risk appetite refers to the losses that you can afford to sustain in case of unfortunate events. It also depends on your financial goals. For example, if your goals are short-term, your risk appetite is very low.
3. Time
The tenure for which you invest your money is another important factor. Your risk appetite and financial goals are directly affected by time.
Why Should You Include Fixed Deposits in Your Investment Portfolio?
If you are involved in a full-time job and do not get time to build your investment portfolio, you can ask an investment portfolio manager to do the job on your behalf. This feature is the primary benefit of a Mutual Fund investment.
On the other hand, if you want to include fixed deposits in your portfolio, here are the reasons why you should do so.
1. To Balance out your Portfolio Risk
Fixed Deposit investments carry the least amount of risk. They not only provide consistent returns, but DICGC (Deposit Insurance & Credit Guarantee Corporation) also provides insurance cover of Rs.5 Lakhs per bank to every investor.
2. Fixed Returns on Maturity
Unlike equity investments, a fixed deposit provides a sure-shot return on investment. Therefore, you know the exact amount of earnings at the end of the FD tenure, at the beginning itself. Hence, you can formulate absolute goal-based planning with fixed deposit investments.
3. Fixed Deposits are the best for short-term goals
When you plan for a short-term goal, your risk tolerance ability is negligible. Hence, you need assured returns. Fixed deposits are the perfect match for this situation.
You can invest in fixed deposits for a tenure of 7 days to 10 Years. A flexible term helps you to avoid unnecessary charges on early withdrawals.
4. The benefit of Compounded Returns
Fixed Deposits provide compounding benefits. As a result, you can reinvest the accrued interest along with the initial principal amount. So, you earn interest on interest or cascading interest.
Conclusion
Fixed Deposit is the guardian of financial serenity in your portfolio! Like a rock amidst turbulent waters, FDs provide stability and reliability, safeguarding your hard-earned money from market storms. The importance of including FDs in your financial portfolio cannot be overstated. With steady returns, minimal risk, and ease of understanding, they serve as a solid pillar of financial strength. So, whether you're a seasoned investor or just beginning to explore the world of finances, embrace the art of diversification, begin with Shriram Fixed Deposits. Secure your financial portfolio while earning returns as high as 9.10%*p.a. inclusive special interest benefits for senior citizens (0.50%*p.a.) and women depositors (10%*p.a.). Begin your fixed deposit with a minimum investment of ₹5000. Invest Now.
FAQs
1. Why is fixed deposit important in a financial portfolio?
Fixed deposits are important in a financial portfolio as they offer a safe and secure investment option with guaranteed returns.
2. What is the minimum amount required to invest in an FD?
The minimum amount required to invest in an FD varies from bank to bank, but it is usually Rs.1,000 or Rs.5,000.
3. What are the benefits of investing in FDs?
Some benefits of investing in FDs include low risk, guaranteed returns, and ease of investment.
4. How does FD compare to other investment options?
Compared to other investment options, FDs offer a lower-risk investment option with guaranteed returns, making them an attractive option for risk-averse investors.
