Advantages of Short-term Fixed Deposits: Why it is Important for You
Fixed Deposits (FDs) are one of the most popular savings tools in India, offering guaranteed returns and capital safety. While long-term FDs are commonly chosen for their higher interest rates, short-term FDs also feature a range of benefits that make them a crucial part of your financial portfolio. What is a Short-term Fixed Deposit? A short-term fixed deposit is an investment where funds are locked in for up to a year. Despite the lesser tenor, these FDs provide attractive interest rates and are an excellent option for those seeking liquidity and flexibility. Advantages of Short-term Fixed Deposits Liquidity One of the primary benefits of short-term FDs is liquidity. Since the investment period is short, your funds are not tied up for an extended duration, making it easier to access your money when needed. This is particularly useful for managing short-term financial goals or unexpected expenses. Flexibility in Investment Tenor Short-term FDs offer a range of tenors, from as little