Fixed deposits are one of the oldest and safest investment instruments provided by the banks. The interest rates on fixed deposits are higher than the interest provided on savings account or current account balances. It is necessary for every individual to diversify his or her investment portfolio into various types of fixed income and variable income investment sources. Fixed deposits are a regular income source of investment.
Reasons for investing in Fixed Deposits
Below are some of the best reasons for investing in fixed deposits:
Fixed Deposits: A Risk-Free Investment
There are some arguments against investment in Fixed Deposits stating that some variable income investment instruments yield higher returns. The variable income instruments such as Equity shares, Mutual Funds and Derivative instruments can provide higher returns but there are higher risks associated with it. The risk tolerance level of an investor guides the investment decisions. For higher returns, there is always a higher risk element, which can also mean losing a huge chunk of money at some point of time in adverse market situations. An ideal investment portfolio is a mix of risky and risk-free investments as per the risk tolerance capacity and risk averseness of an individual. Wealth management experts at Yes Bank help you make the right decisions in relation to your investment needs after assessment of your investment goals and risk tolerance levels.
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