FD

Overall Financial planning

FDs

  1. FDs are opened in banks for fixed periods (Usually 3 to 5 years)
  2. The Money invested in a fixed deposiot grows at a rate of interest decided by the bank.
  3. The Money is payable at the end of the Fixed term.

FDs – Pros and Cons

Pros

  1. The rate of interest is fixed.
  2. The investment is safe in a nationalized bank or Post office.

Cons

  1. The growth is restricted by the rate of interest.
  2. Premature withdrawal of FD attract a penality.
  3. The rate of interest is low and barely manages to beat inflation.