It has been almost a year since COVID - 19 pandemics have knocked on our doors, strong and loud, and to fight it, we need to follow certain precautions. Wearing a mask at public places, maintaining social distance, and washing hands regularly are to name a few.
However, with this pandemic, not only Indian but the global economy has dropped down. The rate of interest on FD has seen a major hit due to the novel coronavirus and in such a situation thinking twice to invest in an FD is very common.
Not even the new investors but the people who have invested their money in a fixed deposit scheme must be worried about the low rate of interest on FD. Most of the banks even SBI bank FD rates have come down to 4.40% for an FD of one year.
At this time thinking to keep cash handy without investing in FD can be a major concern but if we want to invest in such deposits, we must consider the following points in mind:
With such uncertainties that are spreading across, it may not be an intelligent decision to lock your money in long term investment schemes like fixed deposits, PPF, etc. The reason for the same is very simple. Such investment avenues serve very well when you complete their tenure but you may encounter a cash crunch before the maturity of your scheme and this is the last thing that we all need at this time.
However, if you are among those who have already invested in a fixed deposit scheme, then do not rush to withdraw your money instantly. This is because the FD interest rates are at their lowest and they may come down further. It is very unlikely that the rate of interest on FD that you were getting two years back will come back sometime sooner. So, let your investment continue.
If you are among those whose most favorite investment option is FD, then pick the sweep-in option in fixed deposits. Under this option, your fixed deposit account is linked with your saving bank account and its limit is set. This limit is according to the preference of the depositor and it can be Rs. 25,000 for example.
However, if the amount in saving’s bank account exceeds this specified limit, the money is transferred to a fixed deposit account for a certain period. This period is of one year. In this way, liquidity is not affected and the safety of investment is as well ventured.
If you are a senior citizen (more than 60 years old) or you have recently retired and have an ample amount of gratuity with you and you were planning to invest in a fixed deposit scheme, hold on your thinking. If possible rethink this decision of yours. The rate of interest on FD is coming down day by day and this could make a dent in your income from the investment.
This time of pandemic is not a very favorable situation while we talk about the investment of various kinds including fixed deposits. Therefore, experts suggest not to invest your hard-earned money in deposits of banks as there can be an instant need for cash. To cope up with the sudden requirement of cash, it is better to have liquid money that you can pull out at the time of emergency or crisis.
Even though the virus has spread across the world and the global economy is affected, but we do not recommend keeping your money idle. Invest in some good investment options and if you have already invested in a fixed deposit scheme, then let it be there. Do not lose your hope and let the money market come up.
If you have not invested in FD, you can go for some alternative investment options like mutual funds, property, etc. However, do not forget that most of the investments other than fixed deposits require a high-risk appetite. If your risk appetite is low, then FD is your investment option.
Knowing about the points that are mentioned above lets you make a wise decision related to your investment. Do not forget to stay home and stay safe. This crisis will for sure over and as soon as it gets over, you will be able to invest aggressively.
Until that time, it is suggested to hold on and wait for the right time to start investing your money in a full swing. Things are getting better and will get better in the future, so do not worry.
Just remember not to put your money in some wrong investment option that can be painful for you in the future.