SIP vs FD - which is a better option for investment
Investing is a crucial part of growing wealth. This makes investing in the right tool even more vital. Two of the most preferred investment avenues in the country are the Fixed Deposit (FD) and Systematic Investment Plan (SIP). These are preferred because of their safe nature, high return rate and ease of investing. If you are confused about whether is SIP better than FD, this blog will clarify some concepts.
SIP vs FD – which is a better option for you?
SIP and FD both are highly preferred tools in the market if you are aiming to park your hard-earned money. These tools are great if you wish to achieve financial goals in a systematic and disciplined manner. These tools have their respective advantages and disadvantages. For you to select between SIP or FD, to understand which is better, a deep dive into both these tools is necessary. However, having a clear vision of your investment goal is also necessary to make an informed decision.
What is a Fixed Deposit - FD?
A Fixed Deposit is a widely invested-in tool that safely parks your funds for a fixed tenure at a fixed income rate. Banks, post offices and Non-Banking Financial Companies offer FD. The risk involved with FDs is practically zero as these do not get affected by market dynamics and are mostly government-backed and under the tight scrutiny of the RBI. Since it is a fixed-income instrument, you can know exactly how much you would make of your investment at maturity. Bajaj Finance is one such financier that offers the highest safety of funds as well as handsome returns. You can also opt for a non-cumulative payout where you get returns periodically.