www.caspot.com brings you the exclusive post of Make Your Saving By Investments - Different Places Of Investing Your Money
Let me start this way, not all of us are
good in understanding the market and some of us who understand a bit
are usually for the field of finance. But what about the rest of us who
does tried hard and are tired of understanding and are always looking
for investment opportunity but have no clue how to proceed. Investing is
not everyone's cup of tea. Even if some of us manage to invest but
chances of growing our investment are minimal. I am not discouraging
anyone but this is the truth.
Let us accept that not all of us are
good in trading in shares including me and we also don't want to pay
someone to manage our investment.
So what do we do?
Over the years one of the most sought after investment option among all the class of income has been fixed deposit (FD).
What is FD?
Fixed deposit is basically deposit with
the bank which gives us fixed return over a predefined period. Lump sum
amount is deposited with the bank at a fixed interest rate at the start
of the FD term.
However one may face certain issues while investing in FD like:
One may not have sufficient funds to
start FD Even if funds are available many may not prefer to block their
money for long period. They may wish to retain their funds to meet any
contingency. If an individual has just started working, he may not have
enough saving to invest. So what can be done?
Not many of us are aware but banks also
provide recurring deposit facility (RD). It is similar to FD in all its
aspects except in RD the payment is deferred over the period of RD.
Also, the interest accumulated on RD shall be lower as compared to FD.
Let us take an example to understand the
basic difference among the two. Suppose Mr. X invests INR 10,000 in FD
for a period of 10 months so interest will be received on entire amount
for 10 months. Whereas, if Mr. Y invests in RD, he may be required to
deposit each month INR 1,000 for 10 months each. The interest he would
be entitled to would be for 1stmonth on 1000, 2ndmonth on 2000 and so on
with interest on entire 10,000 in the last month. So Mr. Y will get
less interest as compared to Mr. X Should one opt for fixed deposit or
recurring deposit? RD may not be the best investment option but when
someone has loose hand in saving or someone who does not wish to invest
in lump sum; it is surely the option one can consider. It is
specifically suggested to young professionals who find it difficult to
save.
All said and done if some has savings
and is able to save easily, FD is a good option and for other spend
thrifts RD is more beneficial.
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