As you race to work every day, what is the constant thought in your mind? Are you concerned about the day’s tasks, or about making a business presentation, or something else? You may not always realise it, but the one thought that is dominant in your mind is: ‘Am I doing everything I can for my loved ones?’

If you are saving money regularly, it means that you are on the right track to creating future wealth. But saving money alone is a long, challenging process. You can certainly gain by earning savings account interest on the deposits. But the savings fund does not grow as fast as you would like. More to the point, it does not help at key moments in your life, such as paying for your child’s higher education, or making a down payment on a new car, or even creating a retirement fund for yourself.

You can achieve these objectives using your savings money and by creating a fixed deposit.

Why open a fixed deposit?

A fixed deposit (FD) account is one where the bank deposits your money for a certain term (months or years) and pays a certain interest on it at the end of the term. You get back your invested sum as well as make an earning by way of interest.

You can open a fixed deposit online by applying on your bank’s website and completing the application as directed. If you are not sure about why you should open the FD account, consider the following benefits of doing so:

* You get assured returns. The fixed deposit is not like market-linked investments, where market rates determine the growth of the fund. In an FD account, the interest paid by the bank is constant whether rates fluctuate or not. This means that whatever happens, you will get assured growth on your fixed deposit. The risk is also close to nil on the fixed deposit. Also, you can find out the projected rate of growth even before starting the deposit.

* You can liquidate the deposit if needed. Most good fixed deposits have a lock-in period of six months from the time you start the account. You cannot withdraw the money during this lock-in period. Even afterward, it is advisable not to close the deposit prematurely, or you will lose the interest earned on it. However, you can easily liquidate the deposit quickly in case you need the money urgently. In an emergency, your FD account provides a good source of money.

* You get tax rebates on fixed deposits. The tax saving fixed deposits are quite in demand because they offer tax benefits for staying invested for five years. Also, the five-year tax saving FD helps you save your money and gain good earning on it.