Why you should invest in Fixed Deposits for a long term

Fixed Deposit (FD) is a popular way to invest your hard-earned money in a long-term savings instrument. These are offered by banks and financial institutions. You can open an FD for a certain amount and for a particular tenure. It allows you to grow your savings as per your financial goals and enjoy your retirement years. But are these FDs helpful? Read this blog to learn all about the benefits of investing in a long-term FD in India. 

Key Features of a long-term FD

1. Minimum Deposit Amount 

A minimum deposit of ₹ 10,000 is required to open a Fixed Deposit with ICICI Bank. Thanks to its low entry cost, many people can start saving and growing their wealth without needing a sizable upfront investment.

2. Flexible Options for Repayment 

Fixed Deposits offer flexible payout options. You can collect your interest earnings as a lump sum, monthly or quarterly. Thanks to this flexibility, you can match your FD distribution to your financial objectives and needs.

3. Interest Rates for Senior Citizens are Higher

Senior citizens who have Fixed Deposits may receive up to 0.50% higher FD interest rates than the standard rates. With this additional interest, they can maximise their savings and get a better return on their investment.

4. Auto-Renewal Features

When your Fixed Deposit matures, you have the option to have it automatically renewed. By enabling your principal and interest to be automatically reinvested into a new Fixed Deposit, it ensures that your money will grow constantly.

5. Nomination Available

You can designate beneficiaries for your investment in Fixed Deposits. This gives you peace of mind and financial security by ensuring that the final amount is smoothly transferred to your designated nominee, in the event of an unforeseen scenario.

Benefits of choosing a long-term FD

• Security Against Changes in the Market

Fixed Deposits are known for their steadiness because they are unaffected by market changes. Investing in Fixed Deposits is a safe way to protect your savings from market fluctuations.

• Savings for Long-term Objectives

Long-term FDs, typically between 12 months & 10 years, are suitable for goals like buying a new home or planning for retirement. The secured returns and predictable growth make FDs a reliable choice for building up savings over time.

•  Assured Returns

Investing in FDs ensures assured returns, which are often higher than those from regular savings accounts. This makes FDs attractive for investors seeking steady income and capital preservation.

• Competitive Interest Rates

FDs offer attractive interest rates, higher than those of savings accounts. This helps to grow your savings faster and maximise the returns on your investment over the deposit period.

•  Use FDs as Security for Loans

You can avail of a Bank Overdraft facility by using FDs as security. This flexibility gives access to funds without liquidating investments.

• Benefits of Tax Savings

Under Section 80C of the Income Tax Act, investing in 5-year Tax Saving Fixed Deposits offers Tax benefits. These FDs are favoured for Tax planning as they allow you to invest and potentially save up to ₹1.50 lakh annually on taxes.

• Emergency Withdrawal Option

FDs offer emergency or premature withdrawals, subject to penalties and lower interest rates. This option offers liquidity and financial flexibility in the case of unforeseen events.

Who can open a long-term FD?

How to open a long-term FD (12 months to 10 years)?

You can open an FD in 60 seconds with ICICI Bank by clicking here

Here are the ways to open an FD if you are an existing ICICI Bank customer:

Internet Banking

•  Visit www.icicibank.com and log in by entering your user ID and password
• Select ‘Open Fixed Deposit’
• Complete the form and submit it.

iMobile app

• Download the iMobile app on your smartphone
• Log in using your credentials
• Select ‘Open Fixed Deposit’
•  Submit the request. 

Conclusion

An FD is an ideal investment strategy for long-term goals.

With FDs, you can deposit a lump sum amount with the bank and earn interest till the FD matures, ranging from five to ten years.

ICICI Bank offers attractive interest rates on FD with a range of tenure options. Open an FD with us today and meet your financial goals with confidence.