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Bank deposits vs other Investments

Mr. C.S. Sudheer | Posted On Saturday, February 21,2009, 08:18 PM

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Bank deposits vs other Investments



Fixed Deposits are considered to be the safest form of investment or savings that provides returns consistently at a fixed rate. The term fixed in Fixed Deposits denotes the period of maturity or tenure. An Investment means keeping aside money today, to get a higher return in the future.

Bank deposits

  • Bank deposits give an almost assured, fixed and uninterrupted returns
  • It is easy to choose a deposit scheme at a Bank as they are simple and can be understood by a layman
  • Bank deposits are one of the safest investments and risk of default is minimal
  • There are no rebates available under Income Tax for deposits in Banks, except under special schemes now floated by Banks for availing the income tax rebates.
  • Bank deposits gives comparatively lower rate of returns

Other investments

  • The returns from equities, mutual funds are not assured. The company deposits and debentures may stop servicing of interest any time due to losses.
  • The investments in equities and mutual funds is much more complicated and complex for a layman.
  • Investments in equities, company deposits, debentures, mutual funds etc. is more risky.
  • Deposits in schemes like NSC, PPF, Infrastructure allows rebates in Income Tax.
  • Company Deposits, debentures, equities can give higher returns, but have higher degree of risk.

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