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 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
- 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.