Term deposit rates are getting increasingly attractive by the day. With the current global economic slowdown, investment options are very few. Due to the global economic slowdown, people have had their fingers burnt by bad financial packages. Nobody wants to invest their precious money in shady places. But money is an asset that can’t be left lying around in the bank. So you would want to go for something that has the lowest risk involved. Thus, term deposits are the best solutions in such cases.
A term deposit requires you to invest some amount of money with a financial institution like a bank or a brokerage. It will be secured there for a certain period of time, or term. This term can be short or long depending on your needs. During this term, you will not be allowed to remove this amount from the institution. Interest on this amount will be calculated at fixed term deposit rates compounded annually. When the fixed term comes to an end, you will receive the full amount. This amount is the sum of your initial investment amount and the interest you have earned.
This amount will be credited to your account either in full or in installments, based on your plan. Term deposit rates do not fluctuate as per market conditions. These rates are fixed and will be mentioned before you buy the plan. These plans are also tax savers – you can get a rebate on your taxable income on a term deposit saving. The rebate may be in full or in part.
You can make a term deposit plan online. Several financial institutions offer various kinds of plans. It is best that you invest with reputed companies rather than brokers. True, they might be offering you a lower rate than brokers. But at least they are safe. It is also best to invest in a scheme that is simple and has no frills. Usually, the ones that appear too good to be true are the ones that could land you in trouble. When you purchase a plan, take your time with it. Read all the little details in the brochures and forms. It could save you from a lot of trouble in the future.