Security and convenience: Why every investor needs a term deposit

Are you considering diversifying your investment portfolio with a stable avenue that generates guaranteed returns? If yes, term deposits are the way to go!

In the dynamic world of investing, putting all your eggs in one basket is never wise. Instead, spreading your money across different investments allows it to grow at different rates while protecting you from market volatility.

Options like mutual funds and stocks enrich your investment portfolio with high risks and returns. However, it is also important to invest in avenues with lower risks and a steady return on investment.

This is why you need a term deposit in your portfolio. Find out what a term deposit is, how it benefits you, and why you should choose the IDFC FIRST Bank Digital Fixed Deposit (FD) to grow your money.

What is a term deposit?

A term deposit is an investment option where you lock a lump sum amount with a bank for a certain tenure at a fixed interest rate. Upon maturity, you receive the original sum you invested and the interest accumulated during the deposit's tenure.

When you invest your money in a term deposit, it is set aside for the tenure of the investment. This means you cannot access the funds without paying a penalty for premature withdrawal. Due to this, term deposits have flexible time periods to choose from based on your financial goals. These tenures can range from as little as seven days to as long as ten years.

Adding a term deposit to your investment portfolio is a great way to ensure that your money keeps growing through the power of compounding, regardless of market fluctuations. Banks offer two types of term deposits that you can choose from -

1. Fixed deposits (FD) -

These are traditional term deposits in which you lock in your money and allow it to grow based on the interest rate and time.

2. Recurring deposits (RD) -

These allow you to deposit a fixed amount periodically instead of a lump sum at the beginning. This means the principal amount you receive interest on keeps increasing over time.

What are the benefits of a term deposit?

If you are still on the fence about diversifying your investment portfolio with a term deposit, here are some benefits that might change your mind -

1. Greater return on investment -

What sets apart term deposits from your savings account are their higher rates of interest. This means that you receive a greater return on investment by putting your money in term deposits instead of letting it sit idle in your bank account.

2. Safe investment option -

Term deposits are one of the safest investment options for growing your money, especially if the market is volatile. While avenues such as mutual funds and stocks can fluctuate, adding a term deposit to your investment portfolio provides a stable option.

3. Investment portfolio diversification -

A good investment portfolio mixes volatile and stable options, depending on your risk appetite. Term deposits are an easy way of diversifying your portfolio with some stability.

4. Better financial planning -

Setting aside money in a term deposit allows it to grow and remain untouched for some time. This helps you control your spending and plan for long-term financial goals.

5. Flexible payouts -

Financial institutions such as IDFC FIRST Bank offer flexible payouts on their fixed deposits that allow you to collect interest monthly, quarterly, or upon maturity. This way, you can grow your money while choosing an option that supports your cash flow needs.

Opening a hassle-free term deposit with IDFC FIRST Bank

While term deposits are a great way of growing your money, many people feel discouraged to invest in them because of the tedious application process. Multiple branch visits, lengthy paperwork, savings account requirements - all these factors might hold you back from diversifying your investment portfolio.

Thankfully, you can bid the hassle goodbye with options such as Digital Fixed Deposits (Digital FDs) by IDFC FIRST Bank.

IDFC FIRST Bank Digital FDs are standalone fixed deposits, allowing you to invest without the need for an existing savings account! Moreover, they have a fully online application process to start investing from the comfort of your home.

With these Digital FDs, unlock features such as -

1. Interest rate up to 7.50% per annum
2. Flexible tenures ranging from one week to ten years
3. Minimal investment amount starting at just ₹5,000
4. Monthly/quarterly payout options with quarterly compounding
5. Access to overdraft facility against the Digital FD
6. Return on investment up to 8.00% per annum for senior citizens
7. No penalty on early withdrawal for senior citizens
8. Easy foreclosure process in just one simple step

Getting started with your Digital FD only needs a few simple steps -

1. Scan this QR code or visit the IDFC FIRST Bank mobile banking app
2. Complete a quick video KYC and verify your details with an OTP
3. Select the amount you desire to invest as well as a tenure of your choice
4. Confirm your application and transfer the funds

And that's it! Your Digital FD is ready to start growing your money. Sounds very convenient, right?

Start investing in Digital FDs today!

Diversifying your investment portfolio with a stable investment option does not have to be difficult. With the right term deposit, you can generate steady returns without any risks.

Additionally, choosing IDFC FIRST Bank Digital FDs gives you a quick and easy way of reaping the same benefits of a term deposit without the hassle of paperwork. So, what are you waiting for? Apply for your Digital FD today!