Fixed deposits and savings account are both stable investment option for individuals who want a generous return against minimum risk. Both are offered by financial organisations including Non-Banking Financial Companies and are popular amongst both salaried and self-employed professionals. You should carefully consider the differences between FD vs savings account and which one should you opt for investment before zeroing on a particular product.
A clear idea of the differences between fixed deposit vs savings account is critical to understand which one will be better suited for your unique financial requirement and offer the best returns.
Let’s take a look at some of them and decide whether an FD or a savings account will be better as an investment option for you.
Interest Rates –
Comparing FD vs savings account interest rates plays as one of the primary determining factors. A savings account offers an average interest rate of 4%. But a Fixed Deposit from Bajaj Finance comes with 8.75% interest rate. Moreover, senior citizens can benefit from an additional 0.35% interest over the base rate. Bajaj Finance Fixed Deposits are one of the best investment options for individuals looking substantial but secured returns.
Periodic Payouts –
A fixed deposit vs savings account comparison can also be drawn depending on their liquidity. Non-cumulative fixed deposits offer periodic payouts on the interest accumulated on the invested sum. One can even customise the payment structure in monthly, quarterly, half-yearly, or annual payments, or, go for a cumulative FD to get the total earning after maturity.
A savings account has no periodic payment structure. The investor gets interest payouts in half-yearly or yearly intervals.
Emergency Loan –
An investor can take an emergency loan against their fixed deposits at times of emergency. It provides a stable monetary backing to tackle unforeseen circumstances. Bajaj Finserv offers up to 75% of the total amount of their cumulative FD and up to 60% of the amount of non-cumulative FD as loans. The investor can avail such a credit to collect the necessary financing without liquidating their fixed deposit.
Savings accounts do not offer any such facility. An account holder can withdraw the total amount available in the account to meet their financial requirement.
Comparing the above-mentioned factors of fixed deposit vs savings account indicates that fixed deposits offer higher assured returns and more flexible for any investor. Choose your FD provider wisely for the best financial futures.