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Advantages and Disadvantages Of Fixed Deposits - Business - Nairaland

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Advantages and Disadvantages Of Fixed Deposits by froz(m): 9:38pm On Jun 26, 2017
Even if the process of placing a fixed deposit varies slightly from one bank to another, opening a fixed deposit account is still very simple. First, determine how much you want to place in your deposit plan. If you do not have a regular savings account in the bank, you will have to fill-in a deposit mandate form. In some banks, you would also need to fill-in reference forms so you can deposit cheques issued by third parties.


The bank will require; passport photograph, proof of identification, a copy recent receipt from any public utilities and a copy of a residence or work permit for foreign account holders is required. If you have existing account(s) in the bank, you need to just fill-in a form stating the following: account name, account number, deposit amount, duration of deposit.

Advantages

The most important advantage of investing in Fixed Deposit is that, it offers guaranteed return because there are very low risks and uncertainties as compared to investment in stock market. Furthermore fixed deposits are very flexible and convenient in nature because one can have fixed deposit with maturity for 1 month or 1 year with any amount unlike real estate where one needs to invest heavily. In addition, investing in a fixed deposit account earns you a higher interest rate than leaving your money in a savings account as FD’s interest rates are highly negotiable. It is easy to raise a loan against your FD. One can borrow up to 90 per cent of the FD’s amount.

Disadvantages

As attractive as fixed deposits can be, they may not necessarily be suitable for everyone. One of the biggest disadvantages of investing money in fixed deposit is that, its returns are low compared to other investment options and if the inflation is very high fixed deposit investors are the worst hit as the return from fixed deposit may not be sufficient to cover the high expenses due to inflation.

Also, If one invests all of his or her money in fixed deposits, he or she may not enjoy the benefits of diversification which one get if one invests the money in stock market, real estate, gold and other alternate investments. As far as taxation is concerned fixed deposits are taxed at normal rates of taxation and hence one cannot take the tax benefit from this investment, unlike the infrastructure bonds.

Moreover, because your money is locked away with the bank, often for months, you lose the flexibility of a regular, day-to-day savings or current account. If you do withdraw your money from your fixed deposit account before the agreed maturity date, you will likely be penalised in the form of reduced interest or penalty fees.


SOURCE: https://brandspurng.com/advantages-and-disadvantages-of-fixed-deposits/

6 Likes 2 Shares

Re: Advantages and Disadvantages Of Fixed Deposits by prof800(m): 10:20pm On Jun 26, 2017
On point. The banking system is a big rip off.

9 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by rodeo0070(m): 9:13am On Jun 27, 2017
Very Insightful post, OP!

Front page please...

3 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by tripleY(m): 10:25am On Jun 27, 2017
Tot i knew all about Fixed deposit.
Thumbs up OP

4 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by BlueBrothers(m): 7:28am On Jun 30, 2017
Whats the inflation rate in Nigeria right now?
Re: Advantages and Disadvantages Of Fixed Deposits by dexterinc2003: 7:37am On Jun 30, 2017
One of the coded ways the rich keep getting richer. Its for money that is not needed immediately. But then,people would rather opt for MMM.

11 Likes 1 Share

Re: Advantages and Disadvantages Of Fixed Deposits by Angelb4: 7:37am On Jun 30, 2017
Everything about money in Nigerian banks is a disadvantage.

2 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by Chiefpriest1(m): 7:37am On Jun 30, 2017
Who fixes money again. Pure waste. Remember fixing some cash about ten years ago in UBA. I was even the one paying the bank, not the other way round. Always a story.

Time to get my money back, it became a problem. Took close to two weeks to get it liquidated.

Sometimes , the value of your money gets eroded with inflation, leaving you high and dry.

If the money is huge and you won't need it immediately, buy a landed property or an asset that won't deteriorate fast.

Fixing money is useless...

29 Likes 2 Shares

Re: Advantages and Disadvantages Of Fixed Deposits by femo122: 7:38am On Jun 30, 2017
grin
Re: Advantages and Disadvantages Of Fixed Deposits by Arian11(m): 7:38am On Jun 30, 2017
slay goddess wont come to this thread undecided but if it is to spend a man's money they have Phd in that undecided...slay mamas come and learn one or two things


btw amazing thread wink

24 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by bsideboii(m): 7:39am On Jun 30, 2017
Banks make so much money off people's funds.Yet they treat the common man like thrash..giving preference to thief's. In fact the way those customer care guys reply you depends on your account balance they are seeing.

1 Like

Re: Advantages and Disadvantages Of Fixed Deposits by splmosixx(m): 7:39am On Jun 30, 2017
ftc grin
Re: Advantages and Disadvantages Of Fixed Deposits by InvertedHammer: 7:39am On Jun 30, 2017
/
There is no benefit to fixed deposit.

/

1 Like

Re: Advantages and Disadvantages Of Fixed Deposits by Oyindidi(f): 7:42am On Jun 30, 2017
I was advising my brother to put some money in FD, now I know better
Re: Advantages and Disadvantages Of Fixed Deposits by KINGwax007(m): 7:43am On Jun 30, 2017
The only advantage of fixed deposit is that, when the time lapse, you get your money-back no deduction, no story.

All other things are disadvantages!!!

4 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by ednut1(m): 7:45am On Jun 30, 2017
Dis article lack substance, i can bet this op has never fixed his money. . It is subject to 10% wht tax. What is its subject to normal tax angry . Ur money is locked away(no be u go fix ur money). Beta to-do mutual funds or treasury bills

4 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by Nobody: 7:45am On Jun 30, 2017
your money is relatively safe from you at least you wont tamper with it for the time been.

3 Likes

Re: Advantages and Disadvantages Of Fixed Deposits by DatLagboi(m): 7:45am On Jun 30, 2017
sad
Re: Advantages and Disadvantages Of Fixed Deposits by zealz4u(m): 7:47am On Jun 30, 2017
ok
Re: Advantages and Disadvantages Of Fixed Deposits by Oyindidi(f): 7:47am On Jun 30, 2017
KINGwax007:
The only advantage of fixed deposit is that, when the time lapse, you get your money-back no deduction, no story.

All other things are disadvantages!!!
Mind telling me some of the disadvantages
Re: Advantages and Disadvantages Of Fixed Deposits by itiswellandwell: 7:48am On Jun 30, 2017
Thanks Op for this great enlightenment. May God bless everyone endeavors.


Check my signature. You will like those things in there.
Re: Advantages and Disadvantages Of Fixed Deposits by AYOUNG(m): 7:51am On Jun 30, 2017
splmosixx:
ftc grin
Yes my brother, you have finally made it to ftc. grin

I can see your network is super faster.. grin
Re: Advantages and Disadvantages Of Fixed Deposits by chyckxx(m): 7:51am On Jun 30, 2017
Just learnt.
Re: Advantages and Disadvantages Of Fixed Deposits by leksmedia: 7:52am On Jun 30, 2017
For those that knows about investments fixed deposits wouldn't be the best way to invest your money but if you are not familiar with investing , you can go for fixed deposits
Re: Advantages and Disadvantages Of Fixed Deposits by gwmlogistic: 7:52am On Jun 30, 2017
Cool


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Re: Advantages and Disadvantages Of Fixed Deposits by uncletech(m): 7:55am On Jun 30, 2017
Fix with our bank and get 14%return we are runing a promo now pls contact me for more details realplace1983@gmail.com. thank u.
Re: Advantages and Disadvantages Of Fixed Deposits by Nobody: 7:59am On Jun 30, 2017
Oyindidi:
I was advising my brother to put some money in FD, now I know better
Wow,nice color grin cheesy
Re: Advantages and Disadvantages Of Fixed Deposits by adewumiopeyemi(m): 8:01am On Jun 30, 2017
What abouh if the bank is shutdown whah wil happen to our money*... cry
Re: Advantages and Disadvantages Of Fixed Deposits by yinkaellamz(m): 8:03am On Jun 30, 2017
Quite informative.
Re: Advantages and Disadvantages Of Fixed Deposits by Oyindidi(f): 8:04am On Jun 30, 2017
Tahrah:
Wow,nice color grin cheesy
I don join you grin

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