Encyclopedia about fixed deposit

With the advancement in technology, people are discarding the old methods and are adopting a newer perspective towards life. This fresher perspective can be applied to every aspect of life, and one such point is fixed deposits. One can rediscover fixed deposits with a newer outlook. Some common misconceptions surround fixed deposits. It is believed that fixed deposit returns are much lower when compared to the other asset classes. This is not entirely true. The fixed deposit returns are capped, whereas other asset class returns can be more or less. It is also believed that real yields are lower for fixed deposit returns when it is adjusted to inflation.

Almost all asset classes are affected by inflation, and inflation-adjusted returns are much lower. Fixed deposit investments can be spread across banks and private corporations. An individual should also look up to a mix of the tenor. Since, if one is locked up into one tenor, he/she misses other class opportunities. An individual can also hire a smart financial planner if he/she does not know about investing. It is also confusing whether to compound interest or not. Compounding interest comes with both pros and cons. Compounding fixed deposit interest rates assure higher effective yield, but it also takes away the opportunity of reinvesting the regular benefit.

Continue Reading : FIXED DEPOSITS: Rediscovered!
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