The Benefits Of Fixed Rate Saving With Term Deposits

When considering whether to start saving using term deposits, the interest you get is an important feature to factor into the decision-making process. It not only adds to the principal amount you will have saved but helps to cancel the effect of inflation on your account.

If you are going to save a lump-sum or save for a prolonged period, you need to ensure you’re aware of the benefits of fixed rate saving through the use of term deposits.

Continue reading below to learn more about what to expect when choosing a fixed rate.

It’s A Low-Risk Investment

There are times that you need to invest your money because you do not need to use it now. In such cases, you may not be keen on earning a huge interest with a risk of losing most or all of your investment. If that is your current circumstance but you still need to earn a reasonable amount of interest, then invest in a savings account that will give you fixed interest.

The fixed interest will mean that you get a guaranteed return on your savings, but still not have to worry about not being able to access your lump sum or savings. Other investments such as stocks may have a higher return but the risk is much greater. In fact, you may lose everything in the next minute after your investment has been affected.

Your Funds Are Secure

If you need a secure place to invest your money, a savings account that offers you a fixed rate is one of the best places to start. The bank simply guarantees that you will get your money back, plus some interest that will not be altered because if there’s a change in inflation rates.

That makes it ideal for saving for college or a down payment for a new home. You may also use that strategy to save for a new business since you are assured that your savings plan will not be impacted upon.

No Maintenance Fees

Account maintenance fees are some of the ways that you lose your earning in the banking system. You do not need to part with these fees if you are focused on making deposits for a prolonged period. However, you will be penalised if you try to make an early withdrawal from your account. The penalty comes in form of a reduced interest and you have to give 31 days notice to your bank.

No Account Setup Fees

Most regular bank accounts will charge you some form of setup fee to cater for the time their staff will spend managing your account. When you have a fixed amount of money you wish to save the last thing you need is to lose some of it through account fees. Thankfully, you can avoid them by opening a fixed rate interest account that you can only access after the maturity period.

Fixed Terms

Some of the challenges you may encounter when trying to invest your money are the terms of the investment. The small print will usually give your investment partner some leeway to change terms at their discretion. For you, that means losing profits that you had already factored into your financial plans.

A fixed rate savings account will not give you any of those problems. You will get the exact returns that were agreed upon when you made your deposit. If you do not want to deal with surprises after you have made your commitment to saving money, go for a fixed rate.

You Simply Get Peace Of Mind

When you choose a fixed rate savings plan, you get what you agreed upon when the maturity term expires. Moreover, after your term deposit has rolled over, you will have seven days during which there is no penalty for ending the saving agreement. With all these advantages, you have every reason to go for a fixed rate account and set your savings plan in motion today.


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