Fixed deposits have been considered as a safe and reliable investment for decades. This generation has associated the fixed deposits with senior citizens, but young investors can also have significant benefit from investing in fixed deposits. This can probably add strength to their portfolio. Here’s why young investors should invest in fixed deposits to add value to their portfolio. Let’s take a look.

The Need for Fixed Deposits:

Financial Security:

Fixed deposits provide assured returns with minimal risk factor. This makes them a reliable and dependable choice for young investors who are striving towards a stable financial foundation.

Emergency Funds:

Fixed deposits are for use, especially for unexpected expenses and emergencies. This is just a way of setting some money aside for emergency expenses. These are easy to access whenever the funds are needed.

Capital Preservation:

While market-linked investments are at high risk of uncertainty, fixed deposits keep your principal amount safe by making them risk-free investments for individuals.

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Perks of Investing in Fixed Deposits:

Stable Returns:

Fixed deposits offer fixed rates of interest, which are not impacted by market fluctuations. This is a stable way of investing in a risk-free manner.

Flexibility:

Fixed deposits allow young investors to choose their own choice of tenures. This can be totally dependent upon the long-term or short-term financial goals of the investor.

Ease of Access:

Fixed deposits are hassle-free. Many banks offer simple and easy features like auto renewal and premature withdrawal options.

Disciplined Savings:

Investing in fixed deposits promotes the habit of saving and helps young investors to avoid overspending.

Tax Benefits:

Certain types of fixed deposits, like tax-saving fixed deposits, offer deductions under Section 80C of the Income Tax Act.

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