Exploring the Pros and Cons of Fixed Deposits

Fixed deposits (FDs) have consistently been a go-to investment for individuals who prioritise stability and low risk, as opposed to market-linked investments like mutual funds and stocks.

Shriram Finance, a leading Non-Banking Financial Company (NBFC), offers its flagship investment scheme, Shriram Unnati Fixed Deposit, designed to meet the diverse needs of investors. With special interest rates for senior citizens and women depositors, Shriram Finance, with its FD offering, has successfully cemented its position as one of the top players in the NBFC sector.

Pros & Cons of FD

Pros and Cons of Investing in Fixed Deposits

It is always advised to weigh in the pros and cons of opening an FD before parking your funds in the fixed deposit. Given below are a few points to help you make an informed investment decision:

Pros of Fixed Deposits

• Predictable Returns: Fixed deposits offer predictable returns. Unlike market-linked investments, FDs provide investors with predetermined returns at an interest rate fixed during the time of investment. This helps investors to confidently plan and manage their finances.

• Flexible Tenures: Most commonly FDs come with flexible tenure options, allowing investors to choose the duration that suits their financial goals. Whether short-term or long-term, investors can select a tenure ranging from a few months to several years, providing flexibility in aligning investments with their financial plans.

• Easy Withdrawal: Fixed deposits offer easy withdrawal options, providing financial flexibility in emergencies or unexpected expenses. Many institutions allow premature or partial withdrawals, enabling you to access your funds before maturity with minimal penalties. This feature ensures your money remains accessible while still earning interest, making FDs a secure and versatile investment choice.

• FD Laddering: Laddering involves splitting your investment into multiple fixed deposits with varying maturities, allowing you to benefit from higher interest rates on long-term deposits while maintaining regular access to funds. As each FD matures, you can reinvest or use the funds, ensuring a steady cash flow and reducing the risk of locking in a single interest rate.

Cons of Fixed Deposits

• Lower Returns Compared to Market-linked Investments: While fixed deposits offer predictable returns than market-linked investments, the returns are relatively lower compared to equities and/or equity mutual funds.

• Limited Liquidity: Fixed deposits come with a lock-in period, limiting access to funds until maturity. While premature withdrawals are possible, they often incur penalties, reducing the overall returns.

How Shriram Unnati Fixed Deposit Is Breaking Ground in the Investment Sector

Shriram Unnati Fixed Deposit, one of the primary offerings by Shriram Finance, has revolutionised the way investors perceive FDs.

Here are some of its key features and benefits:

• One of the Highest Interest Rates: Customers can enjoy high interest rates on their FD with Shriram Finance, up to 9.40%* p.a. (including 0.50% p.a. for senior citizens and 0.10% p.a. for women depositors).

• High Credit Ratings: FD from Shriram Finance is rated “[ICRA]AA+ (Stable)” by ICRA and “IND AA+/Stable” by India Ratings and Research, making it a dependable choice for investment.

• Flexible Terms: With Shriram Unnati Fixed Deposit, investors can choose from a range of tenure options, starting from 12 to 60 months, allowing them to tailor their investments to specific financial goals.

• Intuitive Digital Platform: Shriram Finance offers a smooth customer experience, with its seamless and secure digital platform. Customers can manage their FDs without a hassle on this trusted NBFC’s website.

About Shriram Finance

Shriram Finance is a leading diversified financial services company in India, offering a wide range of financial products and services across consumer, wholesale, and business finance segments. The company has a strong presence pan India with a network of 3,082 branches and an employee strength of 74,645 servicing to 83.97 lakhs of customers. With a focus on financial inclusion and customer-centricity, Shriram Finance continues to empower individuals and businesses to achieve their financial goals.

Disclaimer: With regards to deposit-taking activity of Shriram Finance Limited (‘SFL’), viewers may refer to detailed information and T&C provided in our application form available at www.shriramfinance.in/downloads. The Company is having a valid Certificate of Registration dated 31st January 2023 issued by the Bank under section 45-IA of the RBI Act. However, the Reserve Bank of India does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.