The month of April is around the corner, and it marks an important time for the Indian financial system. It represents the beginning of a new fiscal year, which leaves us with new opportunities for appraisals. These appraisals bring us not only promotion in designation but also a handful amount of monetary bonuses. Instead of splurging such amounts on lavish lifestyles, a conservative approach can help build for a future. A smart person can invest such bonus sums into investments to have a better corpus at retirement.
What better alternative than investing your hard-earned bonus in fixed deposit (FD)? A fixed deposit is an instrument that provides you a predetermined amount of returns after a specified duration. They work on the principle of high liquidity at lower risks and, at the same time, having a fixed amount of return. The FD in India assures the investor of guaranteed returns. There is a high degree of flexibility in terms of tenure for such a fixed deposit investment.
You can make use of a fixed deposit calculator to know about the amount that shall be received at maturity. Let us understand how investing your bonus in a fixed deposit scheme can be helpful –
Flexibility of Tenures
On comparison of the available investment avenues for risk-averse investors, the top 2 choices are PPF and FD’s. Fixed deposits have a specified duration, but the investor can choose how long they wish to be invested. The tenure for a fixed deposit investment ranges between seven days to ten years. Depending on the amount of bonus, one can decide the duration of FD Investment.
Tax Saving Alternative
Bonuses that are received as part of employment benefits are taxable in the hands of the employees. Investing in a fixed deposit can make such incomes as a tax-free along with it contributing to capital appreciation. Investing in a tax saver fixed deposit scheme can help claim deduction under section 80C of the Income Tax Act, 1961.
Risk-Averse Investment Avenue
The best way you can ensure your bonus remains intact is by investing in a fixed deposit scheme. Investments in stocks, mutual funds, or other debt funds have high volatility, unlike Moreover, one can ensure they receive a guaranteed sum on maturity makes it a more reliable investment avenue for a risk-averse investor.
So instead of leaving your money idle in the account, you can increase your bonus by investing in fixed deposit at negligible risk. This ensures you have stability in your financial growth and saves you from the uncertainty of financial risk.