Is Including FD In An Investment Portfolio A Good Idea?

 The global pandemic of Covid-10 has compelled individuals as well as businessmen from all over the world to reconsider their financial plan, restructure investments, savings and enable them to find new ways to diversify their portfolio risks. There is no doubt that the process of building an effective and result-oriented financial plan starts with the proper understanding of financial instruments. But FD i.e Fixed Deposits have always been one of the most frequently used, safest, and smartest finance choices among corporate businesses and also individuals that deserve to be in their investment portfolio. 


The foremost reason for considering FD as an investment option is its assured guarantee of getting returns. Although the falling interest rates on FDs and day-to-day curiosity towards other investment instruments like equities, most of the investors are shifting their investing preferences to market-linked products including mutual funds, etc. It can be a great move but this does not alleviate the importance of FD. 


FDs can be a good addition to your investment portfolio and if you have doubts about it, this blog/guide can help you. Let’s have a look:




Reasons To Include FDs In Your Investment Portfolio


  1. They Reduce Portfolio Risks - There is no doubt that Fixed Deposits are one of the safest investment options compared to other instruments like stocks etc. With less vulnerable interest rates and guaranteed returns after the maturity period ends, the collection of funds that you put in your FD acts as a great way to secure your capital through asset allocation. Unlike mutual funds that provide growth scope to your money over the long term, FDs provide stability to your portfolio.

  2. They Are Secure - In addition to providing low risks and guaranteed returns, they also ensure the safety of deposited funds based on the ratings provided by CRISIL. The highest security level is FAAA which demonstrates the highest rating for the financial instruments including the sound finance stage through payment of interests and principal. 

  3. Fulfill Short-term Finance Needs - Fixed deposits are undoubtedly the best investment options for individuals having short-term financial goals and require a certain amount within a prescribed period. Individuals who are not willing to lock their capital for a long period and need flexible finance assistance can surely go for fixed deposits. They provide guaranteed results upon their maturity. This way, you can fulfill your financial goals efficiently.





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