When the COVID-19 pandemic struck, markets experienced a dip and investors saw their earnings wiped out. Uncertainty and fears emerging from the pandemic’s impact on global economies led to markets falling around the world. However, there was one financial instrument that remained unscathed from the volatility.
Fixed deposits (FD) have, time and again, proved to be one of the safest investment options. They have, quite literally, become synonymous with stability. Because FDs offer assured returns that aren’t subject to market conditions, investors suffered no losses during the pandemic.
In fact, this is still a good time to put your funds away in a fixed deposit. Let’s explore how FDs proved to be resilient to the pandemic and will continue to remain so.
Fixed deposits aren’t vulnerable to market conditions
Because FDs offer yields independent of market volatility, you can be assured of good returns. Even when the market suffered during the pandemic, FD investors continued earning fixed returns on their corpus. With things looking up and vaccination in full force across India, risk-averse investors will find FDs to be a stable mode of investment. No matter what happens in the future, your money stays safe in an FD and continues to grow.
So, will it be a good idea for you to invest in a fixed deposit as we emerge from the pandemic? Absolutely yes. Let’s see why.
You don’t need a large sum to invest
FDs are safe investment options that allow you to earn good interest on your principal amount. However, you don’t need to put a huge sum away in a deposit. Depending on the bank you choose, you can start with smaller amounts. In fact, you can open several FD schemes so your money is even safer and your portfolio is diversified.
You enjoy stability
While equity investments are susceptible to market fluctuations, your FD stays safe from interest and capital loss. It gives you a fixed rate of return, depending on the bank and scheme you choose. This means that you can be sure of the money you will receive upon maturity. This holds true despite the state of the economy at the time.
Stocks, on the other hand, are highly dependent on political and economic conditions. Especially in times such as a raging pandemic, they will offer unstable returns. With an FD, there are no surprises around the corner. You know exactly how much your investment will grow over the years.
Meet your financial goals with fixed deposits
An FD is perfect for meeting short-term goals, ideally over the next one-three years. While stocks might see unpredictable highs and lows during this period, your FD investment will grow and offer a decent return.
Whether you are planning an international trip or want to buy your dream car, you can use the FD amount to fulfil your dreams. With a fixed deposit, you will know exactly how much money you will have at maturity, and you can plan your wedding accordingly.
There is no doubt that the pandemic has been hard on our finances. On the bright side, it has taught us to appreciate the value of money and be careful with our investments. For a secure future, even in turbulent times, invest in a good fixed deposit product.
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