When we sit to plan our finances, we usually focus on our long-term financial goals, however, certain short-term goals might require lot of funds as well. People opt for short-term investment plans so that they can grow their funds quickly and be able to avail the returns instantly. Short-term investments are generally made for a period ranging from 7 days to 12 months. Investments that are made for a tenor of more than 12 months is termed as long-term investments. You can invest in stable short-term plans like fixed deposit (FD), or invest in volatile investment instruments such as equity markets.
FD is an investment where you deposit a fixed amount for a set time (tenor) for a pre-decided interest rate. It is one of the most favorable investment options due to the low risks associated with it. You get guaranteed returns with zero fluctuation from investing in an FD. The fixed tenor and penalty charge on premature withdrawal helps you protect your asset for a locked time. You can get tax benefits in FD with specific terms and conditions.
Stock market is the procedure of taking over the shares in a company or a business. Among all the investment options, stock market/equity market gives the highest rate of returns from investments (12% to 15%). You can make withdrawals anytime that can impact your long-term investment goals. Equity market is the least secured investment option. If you do not monitor your investments in an equity market, you may lose your asset. At the times of fall in the market rates, you can transfer your investments to other profitable investment options.
How to Tackle Stock Market Crash?
Stock market crashes are inevitable. Be it later, be it sooner, markets do crash. In one of the major equity crashes, markets went down by 50%, and many stocks lost more than 95%. Stock market crash cannot be predicted. And so, it is essential to be ready for smart investment choices. With fixed deposits, your investments are more secure compared to stock markets (at the cost of low returns). You would get a clear idea of the two investment plans from the following table:
Advantages of Investing in Fixed Deposits
Low Risk
FD is not dependent on market rate fluctuations that help the growth of your investment at a steady rate. Many banking and Non-Banking Financial Companies (NBFCs) provide the facility to open an FD. Prominent NBFCs like Bajaj Finance FD interest rates ranging from 7.72% to 9.10%. With CRISIL’s FAAA and ICRA’s MAAA ranking, the company has evolved to be one of the most reliable financial providers. Additionally, Bajaj Finance offers a wide array of financial products for children, senior citizen, and women.
Fixed Tenor
FD reduces the risk of premature withdrawal by providing flexibility in choosing the tenor. You can opt for short-term tenors as well as long-term tenors as per your needs. Whatsoever the tenor is, your investment is secure for that particular tenor. In fact, there is an option to renew your FD for higher interest rates and significant returns.
Loan against FD
In the case of financial emergencies, you can avoid losing your benefits due to premature withdrawal by taking a loan against your FD. Bajaj Finance provides this facility wherein you can use up to 90% of your FD amount with lower interest rates compared to that of a standard loan.
With an overview of both the investment plans, you can choose one that is best suited according to your financial goals. Even if you wish to invest in volatile stock markets, make sure to always keep a backup plan by investing in an FD. You can choose a tenor of 12 months to 60 months with a minimum investment of Rs. 25000 with Bajaj Finance. You can calculate the interest rates, returns and check the eligibility online with the interest rate calculator available on the website. Fixed deposit not only gives you a sense of security, it provides you fiscal balance in times of financial crunches.
FD is an investment where you deposit a fixed amount for a set time (tenor) for a pre-decided interest rate. It is one of the most favorable investment options due to the low risks associated with it. You get guaranteed returns with zero fluctuation from investing in an FD. The fixed tenor and penalty charge on premature withdrawal helps you protect your asset for a locked time. You can get tax benefits in FD with specific terms and conditions.
Stock market is the procedure of taking over the shares in a company or a business. Among all the investment options, stock market/equity market gives the highest rate of returns from investments (12% to 15%). You can make withdrawals anytime that can impact your long-term investment goals. Equity market is the least secured investment option. If you do not monitor your investments in an equity market, you may lose your asset. At the times of fall in the market rates, you can transfer your investments to other profitable investment options.
How to Tackle Stock Market Crash?
Stock market crashes are inevitable. Be it later, be it sooner, markets do crash. In one of the major equity crashes, markets went down by 50%, and many stocks lost more than 95%. Stock market crash cannot be predicted. And so, it is essential to be ready for smart investment choices. With fixed deposits, your investments are more secure compared to stock markets (at the cost of low returns). You would get a clear idea of the two investment plans from the following table:
Fixed Deposits
|
Stock Market
| |
Interest Rate
|
Average
|
Extremely high
|
Liquidity
|
Average
|
Extremely high
|
Volatility
|
Low
|
Extremely high
|
Taxation
|
Interest earned is completely taxable
|
The dividend for short-term investment are taxable.
The dividend for long-term investment are tax-free.
|
Advantages of Investing in Fixed Deposits
Low Risk
FD is not dependent on market rate fluctuations that help the growth of your investment at a steady rate. Many banking and Non-Banking Financial Companies (NBFCs) provide the facility to open an FD. Prominent NBFCs like Bajaj Finance FD interest rates ranging from 7.72% to 9.10%. With CRISIL’s FAAA and ICRA’s MAAA ranking, the company has evolved to be one of the most reliable financial providers. Additionally, Bajaj Finance offers a wide array of financial products for children, senior citizen, and women.
Fixed Tenor
FD reduces the risk of premature withdrawal by providing flexibility in choosing the tenor. You can opt for short-term tenors as well as long-term tenors as per your needs. Whatsoever the tenor is, your investment is secure for that particular tenor. In fact, there is an option to renew your FD for higher interest rates and significant returns.
Loan against FD
In the case of financial emergencies, you can avoid losing your benefits due to premature withdrawal by taking a loan against your FD. Bajaj Finance provides this facility wherein you can use up to 90% of your FD amount with lower interest rates compared to that of a standard loan.
With an overview of both the investment plans, you can choose one that is best suited according to your financial goals. Even if you wish to invest in volatile stock markets, make sure to always keep a backup plan by investing in an FD. You can choose a tenor of 12 months to 60 months with a minimum investment of Rs. 25000 with Bajaj Finance. You can calculate the interest rates, returns and check the eligibility online with the interest rate calculator available on the website. Fixed deposit not only gives you a sense of security, it provides you fiscal balance in times of financial crunches.
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