Saving money is compulsory to find support during the hard times of life and to ensure a safe future. It is a fact that investing at the right path can bring bigger benefits than simply storing money in an ordinary savings account. However, there are multiple saving options available these days and anybody may get confused about choosing the right one for them. As a matter of fact, both SIP and fixed deposit are two of the most popular investing options nowadays that come with an assurance of a better return in future. Let’s see how much we know so far about these two.
The term SIP stands for Systematic Investment Plan. In simple terms, it is the most common way of investing in mutual funds. SIP allows you to invest a certain amount of money each month and it’s more like a goal-centric investment. You can also use an SIP calculator before investing to measure the amount of interest.
On the other hand, a fixed deposit is more like a one time investment of a big amount. One major factor about fixed deposits that you must have knowledge about is, you can not break your deposit within tenure. If you face any critical financial emergency in life and face the need of breaking your fixed deposit within the tenure then you must pay a certain amount of fine to the bank. If you follow all the guidelines and wait till the moment your fixed deposit tenure is completed, the entire invested money amount including the interest will be sent to your bank account. Let’s talk about some basic advantages of these two.
Benefits of fixed deposit
- Through a fixed deposit, it’s possible to get guaranteed returns according to your investment.
- You can flexibly choose the tenure or investing amount as per your requirements.
- Fixed deposit is considered as one of the most risk-free investment options.
- Through tax-saving FD schemes, you can also get some tax benefits.
- You can also get loan facilities depending on the deposit amounts or the bank’s FD terms.
Benefits of SIP
- You don’t need to keep monitoring the interest rates if you are investing in SIP.
- You can invest in SIP easily and quickly according to your needs.
- Just because SIP is considered as a low-initial investment, it will be a perfect investment option for you if you are looking for monthly investment options without causing any hamper to your budgets.
There are many other short term and long term investment options nowadays that can also be extremely beneficial for you. You may consult an expert to fetch more necessary information in this regard.
