Debunking 6 Fixed Deposit Myths
Some people who are just starting their business usually find it to be such a risky move in getting fixed deposits when in reality it’s a very safe and reliable investment option. This is understandable because nobody wants to lose their money in any way possible. But it is important to separate fact from fiction in order to have growth in your business. Let’s debunk six common myths about fixed deposits!
Fixed Deposits Are Not THAT Risky
Investments and loans in general are risky but honestly, one of the biggest misconceptions about fixed deposits is that they’re a gamble. In reality, fixed deposits are actually known for their safety and security. If you decide to get a fixed deposit, your principal amount is actually protected. What’s great is that you’re guaranteed a fixed deposit interest rate for the duration of the term. Another benefit is that you’re also able to supervise the cash flow on a wider scale. This stability makes FDs a popular choice for conservative entrepreneurs who want a predictable return on their money. If you’re the “high risk, high reward” type of person, you may want another method of increasing your earnings. In other words, fixed deposits are ideal for overthinkers. Unlike stock investments that have higher-risk options, fixed deposits offer a reliable way to grow your savings with minimal risk.
Fixed Deposits Have DON’T Necessarily Have Low Returns
Just because fixed deposits are not “high-risk” doesn’t mean it offers very low returns. While it’s true that FDs do not provide the same high returns as riskier investments, they’re not that bad in reality. Fixed deposits often offer competitive interest rates compared to traditional savings accounts. In fact, a lot of people find that the fixed deposit interest rate is better than risking it all in stock investments, cryptocurrencies, or forex trading. This is beneficial if you prefer longer-term deposits and look around for the best rates. If you explore beyond your usual options for fixed deposits in Singapore, it may lead you to surprising benefits.
Fixed Deposits Are BOTH for Short-Term Savings and Long-Term
Yes, you heard that right, fixed deposits are not only suitable for short-term savings – they’re highly beneficial in the long run as well. Fixed deposits have countless terms you can choose from ranging from a few months to several years which means you can definitely find one that best fits your financial goals. Whether you need funds for a short-term or a long-term goal, you can find a fixed deposit term that meets your business’ needs. We all have our own reasons but let’s say you’re managing a business and considering a commercial property loan, you should consider putting a portion of your funds in a fixed deposit that can provide a secure and stable return while you focus on your larger financial commitments.
You CAN Access Your Money Early
Many people believe they’re stuck with a fixed deposit long until the term ends. While it’s true that fixed deposits are designed for long-term savings, most banks allow you to withdraw your money early if you need it. Although there are instances where you may receive penalties or reduced interest rates. But that’s okay because these deductions are mostly kept to a minimum. Always, remember to review the terms and conditions of your fixed deposit before investing to understand the withdrawal policies. Always choose a term that best suits your needs because flexible conditions can be helpful if your financial situation changes unexpectedly.
Fixed Deposits DO Offer Any Tax Benefits
If someone says that fixed deposits don’t offer any tax benefits – don’t believe it. It actually differs from every place so research on your country’s tax laws. Know if you are eligible for tax benefits on the interest earned from your fixed deposits. In Singapore, interest income from FDs may be tax-free up to a certain limit which is beneficial for startups or for those who want to expand their business. Don’t hesitate to consult a financial advisor or might as well head to the local tax authority to understand the tax implications of your commercial property loan investments.
Fixed Deposits Are NOT Outdated
Because of the investment landscape in today’s time, some might think that fixed deposits are outdated. This is not true as fixed deposits remain to be a very popular choice for many investors due to its simplicity and stability. FDs can definitely be useful in keeping your money safe while earning a guaranteed return. part of your investment plan. Given the fact that stability is assured in fixed deposits, they continue to be relevant and useful for achieving various financial goals. It all depends on your strategy in growing your buck but if you find fixed deposits to be the best way to go, you should consider it at any time.
Now that these myths are debunked, do you think you’ll consider fixed deposits? Fixed deposits will always be a safe and predictable way to grow your savings with great interest rates and flexible terms.
Fixed deposits have a lot of benefits however they are often misunderstood, so let RHB Bank help you with differentiating fact from fiction!