One can have many ways to earn some surplus income. The surplus income may come from a business profit, a salary hike, or gratuity. You need to know that saving a surplus income would not benefit you but investing it can. Investments always help you earn a little more than an existing amount in your pocket.

Investing your money instead of saving them can be any day a better option. Investment helps you to grow your money whereas saving it does not. Investments give you many options where you can invest your surplus income and replicate them. You can either invest in gold, shares, mutual funds or fixed deposits.

Now some investments do involve risk but they benefit you with a higher profit. As investments like mutual funds, gold, shares depends upon the market conditions they involve much high risk. Fixed deposits, on the other hand, are considered much safer as they don’t depend on the market conditions.

Generally, the market conditions determine the investments as they keep on fluctuating. This fluctuating market conditions can thus make the investment a risk-taking one. The interest offered on the investments such as mutual funds, shares are higher but they depend upon the market which can change as the market fluctuates. It can either be high sometimes or go low.

Whereas, investing in a fixed deposit can be much safer as it involves fewer risks. Fixed deposits involve low risk they do give you high returns on your funds. The interest rates on a fixed deposit are high as compared to a savings account. Many people in India invest in fixed deposits as it is a much safe and has low risk associated with it. Banks fixed deposits can be a very safe place to invest in.


Interest rates:

The rate of interest on fixed deposits is higher as compared to a savings account. Interest rates on fixed deposit investments can differ from bank to bank. Very few banks offer the same interest rate on your funds. Now, interest rates also depend upon the amount you’re investing plus the tenure of your investment. Depending upon the amount you invest the bank decide the interest rates. Banks offer higher interest rates to senior citizens under senior citizen fixed deposits.

If you have a lump sum amount to invest, you can certainly go for investing in multiple fixed deposit account by splitting the amount. This can benefit you with more profit plus also will save you from taxation. Banks charges you with taxation if the interest offered to you by the bank is above INR 10,000. Also, banks charge a fixed rate of interest on your fixed deposit which is unlikely to change over your tenure. You can check your returns before investment your money in fixed deposit schemes by using online fd calculator.

In the case of a financial emergency fixed deposit investments restricts you from withdrawing your funds. In such a case you can go for an overdraft facility. Overdraft facility allows you to withdraw up to 90% of the cash from your existing funds of your fixed deposits. You have to repay the loan that you take against your fixed deposit. The interest rate should be repaid with the borrowed amount on the last date of overdraft facility.

Not only banks but NBFCs also offers fixed deposits. NBFCs offer you much higher interest rates than banks offer you. If you wish to earn 2% more profit over your investment than NBFCs fixed deposits can be the best to invest in. An important thing to remember here is that investing in NBFCs is unsecured as they are not banks. Before investing, make sure you do a proper research on the financial institution that you choose.