Fixed Deposits (FDs) and Bonds are popular investment options that offer fixed returns over a predetermined period. Both FDs and Bonds are considered relatively low-risk investments suitable for conservative investors, including senior citizens and NRIs. Here's a brief explanation of FDs and Bonds:
Fixed Deposits (FDs):
- Definition: FDs are financial instruments offered by banks and other financial institutions. Investors deposit a specific amount for a fixed period at a predetermined interest rate.
- Returns: FDs provide fixed returns at a predetermined interest rate over the investment period. The interest rate is usually higher than regular savings accounts.
- Maturity Period: FDs have a predetermined maturity period, which can range from a few months to several years. At the end of the maturity period, the principal amount along with the interest is returned to the investor.
- Liquidity: FDs have a fixed lock-in period during which the funds cannot be withdrawn without incurring penalties. However, some banks offer premature withdrawal options with certain conditions.
- Safety: FDs are generally considered safe investments as they are insured by deposit insurance schemes provided by regulatory authorities in most countries. This ensures the return of the principal amount in case the financial institution faces any financial difficulties.
Fixed Deposits (FDs) and Bonds are popular investment options that offer fixed returns over a predetermined period. Both FDs and Bonds are considered relatively low-risk investments suitable for conservative investors, including senior citizens and NRIs. Here's a brief explanation of FDs and Bonds:
Fixed Deposits (FDs):
- Definition: FDs are financial instruments offered by banks and other financial institutions. Investors deposit a specific amount for a fixed period at a predetermined interest rate.
- Returns: FDs provide fixed returns at a predetermined interest rate over the investment period. The interest rate is usually higher than regular savings accounts.
- Maturity Period: FDs have a predetermined maturity period, which can range from a few months to several years. At the end of the maturity period, the principal amount along with the interest is returned to the investor.
- Liquidity: FDs have a fixed lock-in period during which the funds cannot be withdrawn without incurring penalties. However, some banks offer premature withdrawal options with certain conditions.
- Safety: FDs are generally considered safe investments as they are insured by deposit insurance schemes provided by regulatory authorities in most countries. This ensures the return of the principal amount in case the financial institution faces any financial difficulties.
