Why should you invest surplus funds in FD: FD vs savings account, which is better?

When it comes to investing surplus funds, individuals have multiple options to consider. However, fixed deposits (FDs) are still one of the most popular and preferred options. Fixed Deposits offer individuals a way to invest their money with a set rate of interest. Investors commit a set amount of funds for a predetermined period and receive a higher interest rate than they would on a savings account. In this article, we will take a detailed look at why investing in fixed deposits is a good option compared to a savings account.

Fixed Deposits vs. Savings Accounts:

Savings accounts are a popular choice for individuals looking to store their cash, allowing them to access their funds whenever they need it. However, the interest rates on savings accounts are generally low. For instance, the interest rate offered by top banks in India for their regular savings account ranges from 2.70% to 3.50%.

On the other hand, Fixed Deposits offer higher interest rates, which can be between 4% to 7.50%, depending on the bank, the amount invested, and the duration of the deposit. By investing in a fixed deposit, individuals can earn a fixed interest rate on their investment for the entire tenure, providing them with a secure and assured source of income.

Moreover, Fixed Deposits are predictable, and investors can calculate the exact amount that they will receive at maturity, making it easier to plan their finances. In comparison, savings accounts offer a lower interest rate, and the rate is subject to change by the bank without prior notice, making it difficult for individuals to plan their finances accordingly.

Sweep-in facility:

Sweep-in facility is a type of bank account feature that helps customers to maximize their returns by transferring surplus funds from one account to another. This facility is commonly offered on savings accounts, current accounts, and fixed deposit accounts. The feature works by automatically transferring funds from a savings account to a fixed deposit account or vice versa, based on pre-determined rules set by the bank.

Typically, when a customer’s savings account balance exceeds a certain threshold, the surplus amount is automatically transferred to their fixed deposit account, where it starts earning a higher rate of interest. Conversely, when the customer’s savings account balance falls below a certain threshold, the required amount is automatically transferred back to the savings account from the fixed deposit account.

Sweep-in facility offers customers the convenience of maintaining their funds in a single account while earning interest at a higher rate. This facility is particularly useful for individuals who have considerable idle funds in their savings accounts and want to earn a higher rate of interest without having to open a separate fixed deposit account.

Banks like HDFC Bank, ICICI Bank, and others offer sweep-in facility on their accounts, making it easy for customers to manage their funds and optimize their returns. Some banks also allow customers to modify the threshold limit and the rules governing the sweep-in facility as per their convenience.

Fixed Deposit Apps:

Fixed Deposit apps like Bajaj Finserv App, HDFC Bank, ICICI iMobile App, Axis Bank are making it easier for individuals to invest in fixed deposits. These apps provide a convenient and hassle-free way to invest in Fixed Deposits. Using a Fixed Deposit Calculator App, investors can calculate the exact amount they would earn on their deposit and choose the tenure that suits them best.

Bajaj Finserv App:

Bajaj Finserv App is a popular choice for individuals looking to invest in Fixed Deposits. The app provides a user-friendly interface that makes it easy for investors to invest in Fixed Deposits. With the Fixed Deposit Calculator App, investors can accurately calculate the amount they would earn on their deposit based on the tenure and amount invested. Bajaj Finserv App also offers a high-interest rate of up to 8.60%, providing investors with a secure and assured source of income. Users can get special ROI on FD for senior citizens.

HDFC Bank:

The HDFC Bank Fixed Deposit App is another popular option for investors looking to invest in fixed deposits. The app provides individuals with a hassle-free way to invest in Fixed Deposits and also offers a higher interest rate of up to 6.25%. With the Fixed Deposit Calculator App, investors can calculate the exact amount that they would earn on their deposit based on the tenure and amount invested.

ICICI iMobile App:

The ICICI iMobile App is a convenient option for individuals looking to invest in fixed deposits. The app provides a user-friendly interface, making it easy for investors to invest in Fixed Deposits. With the Fixed Deposit Calculator App, investors can accurately calculate the interest they would earn on their deposit based on the tenure and amount invested. ICICI iMobile App also offers a higher interest rate of up to 6.25%.

Axis Bank:

The Axis Bank Fixed Deposit App is a popular option for individuals looking to invest in Fixed Deposits. The app provides a hassle-free way to invest in Fixed Deposits and also offers a higher interest rate of up to 6.75%. With the Fixed Deposit Calculator App, investors can calculate the exact amount they would earn on their deposit based on the tenure and amount invested.

In conclusion, Investing in fixed deposits is a good option compared to savings accounts as it offers a higher interest rate, assured returns, fixed interest rate, and predictability. Individuals can use Fixed Deposit apps like Bajaj Finserv App, HDFC Bank, ICICI iMobile App, Axis Bank to invest in Fixed Deposits hassle-free. With the help of the Fixed Deposit Calculator App, investors can accurately calculate the returns on their investment and choose the tenure that suits them best.