Investments are a good way to earn high returns on your money. When it comes to investments, there are many options in the market. You can either go for a high-risk investment or a low risk one. Generally, there are two common investment options which people in India opt for: fixed deposit investment and real estate investment. Let’s take a look at which one is the right option for you.
Fixed deposit investment:
Generally, people prefer investing in FD as it involves lower risk and assured returns. Fixed deposit investments offer you a fixed interest rate throughout the tenure of your deposit. This rate of interest is not dependent upon market conditions. Hence, fixed deposits are considered to be one of the safest investment options out there.
There are many additional benefits to investing in a fixed deposit. If you are stuck in a financial emergency, then you can use an overdraft facility against your fixed deposit and withdraw funds from that account. When you opt for an overdraft facility, you can withdraw up to 90% of the amount from your fixed deposit account. Also, you are provided with insurance worth INR 1 lakh to safeguard your investment. Before investing in FD scheme you can also can check how many returns you will get after maturity through online FD calculator.
Real estate investment:
If you are planning to buy a house, then real estate investment might work perfectly for you. As the interest rates on all housing loans have been discounted after the demonetisation drive, now would be the right time to invest in real estate.
However, as the cost of housing properties is rising constantly, you might have to take a loan in order to buy a house. While this requires a long-term financial commitment on your part, real estate investments give you equally long-term benefits, as the value of your property generally only rises with time and increasing property costs. Thus, you have the option of selling your property for a tidy profit at some future date.
Still confused as to which is the better option for your needs? In that case, it is advisable to invest in a fixed deposit rather than in real estate, the chief reason being that fixed deposits can come to your aid in an emergency, since it is easier to withdraw your money from a fixed deposit than to pull out of a home loan or property purchase. Fixed deposits allow you to either break the deposit by choosing to pay penalty charges, or use an overdraft facility to withdraw part of the funds for immediate use.
However, if you invest in real estate, you will either need to sell the property, which generally takes time and is a complicated financial transaction, or default on your home loan, which would leave you in a terrible financial mess. Thus, if you are unsure of your ability to carry on a long-term financial obligation such as a home loan, it would be better for you to invest in a fixed deposit account instead.