While investments are mostly tailored according to our needs, wants, and goals, there are a few financial instruments that are essential for every portfolio. And one such plan has to be a Fixed Deposit (FD). While there is a lot that has been said about this traditional investment, it still stands as one of the smartest choices that needs to be in your investment kitty.

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Fixed deposits are one of the safest investment options, especially when you compare them with stocks or any other market-linked instruments. With low volatility, the corpus that you set aside in FDs serves as a great way to ensure that your capital is safe. If you are just starting out with different investment options, then investing the same amount as your capital is an easy way to arbitrage your risks and receive an assured amount at maturity.

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In addition to the low-risk of the actual products, the safety of the funds can also be assessed based on the ratings provided by companies like CRISIL

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One can start early and multiply wealth with the power of compounding. Small amount can turn bigger with compounding; when the compounded interest is reinvested with the principal amount ranges from 6 months to 10 years fixed deposit.
 

Cumulative fixed deposit is good for those who are not in need of regular interest payment as the interest is paid at the time of maturity in addition to the principal. Cumulative fixed deposit schemes/compounding can, therefore, be known as money multiplier schemes. On the contrary, in a non-cumulative fixed deposit scheme, interest is payable at fixed frequencies.

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So whether you are looking for security, surety or sheer comfort of returns and benefits, FDs fit all your needs, making them a must-have for every type of investor.
 

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