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Saving money is easier said than done. It is a smart move to save money in the long run rather than spending less. The money can be used for a future need that might arise with a surprise. The smart savers are those who manage their expenses. First thing you need to do is make a budget and try to stick to it. Start saving from an early stage and make as less debts as possible.

Fixed deposit is a safer investment option. It is quick and easy. All you have to do is deposit a certain amount of money for a certain period of time. The interest rates provided on fixed deposits are high and you do not have to worry about losing any money. The investment period starts from 7 days and can go up to 10 years. Based on the important events in your life, you can invest accordingly so you can get the matured interest.

The interest earned is paid out in two ways: In cumulative deposits, the interest is calculated quarterly or annually but is paid out at the end of the tenure. In non-cumulative deposits, the interest is calculated annually, quarterly or at a discounted monthly rate. The interest on your money can be paid out to you on a monthly or yearly or on the quarterly basis. This way you can ensure you get a constant mode of income. Whereas on the savings account the interest earned is lower and the returns are not so high.

• It helps you save money for a longer period without having a chance to withdraw.
• You earn higher rate of interest compared to depositing in a savings account.
• The returns on your investment is guaranteed.
• In case you have incurred a loss in your business, the fixed deposit amount gives you a security net. The banks provide loan on the fixed deposits up to 70-90% of the amount is given as credit.
• The interest can be earned at maturity or annually or on a monthly basis at a discounted rate. This ensures your cash flow.
• You can choose the tenure of investment. The tenure ranges from 7 days- 10 years.
• To meet the financial obligations on your future known events of life, you can make investments in various fixed deposits so that they mature around the time you need the money.
• You can get a credit card from the bank without even having a CIBIL score as the bank provides credit against 70-90% of the fixed deposit amount. This way you can get a start on the CIBIL score as the banks need you to have a credit information recorded with CIBIL to provide you loans.
• While you have loans and credit cards taken against the fixed deposit, you will not stop earning interest on that amount. The banks use the fixed deposits as securities to offer you loans and credit cards.
• Some banks offer you EMI cards, which will give you a certain limit of credit. The purchases made on this card can be repaid on an EMI basis.
• The interest earned below Rs.5,000 has no tax deductions at source.
• Fixed deposits up to Rs.1 lakh for 5 years are eligible for tax deductions under Section 80C of the Income Tax Act, 1961.

The banks do let you withdraw money before the maturity date, but a penalty is charged. The interest earned is lower compared to the interest earned in stock markets. The interest earned above Rs.5,000 is taxed. If the inflation is at its peak, the interest benefit is slashed. Opening a fixed deposit account means the money is not available to you for the certain period of time. Take a call on taking the fixed deposit once you know where you stand financially.