Whether you are just starting your investment journey or are a professional investor with years of experience, you must follow the fundamental rule, i.e. to have a diversified portfolio for achieving success. A diversified investment portfolio refers to the allocation of investments across different asset classes to minimise the risk and optimise returns.
A diversified portfolio helps in spreading the risk across different investment instruments and reduces the risk of loss due to one asset performing poorly. It is also essential for long-term stability and growth, as it negates the impact of market volatility and creates a balanced investment approach.
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Diversifying Your Investment Portfolio with Fixed Deposits
Fixed Deposits, or FDs, are one of the most popular investment options in India. It not only guarantees the safety of your principal amount but also offers assured returns over a fixed period. Having an FD in your investment portfolio gives you the much-needed diversification and stability; the FD returns you get are at fixed interest, irrespective of the market conditions.
Additionally, Fixed Deposits help you balance the riskier assets in your portfolio, such as shares or mutual funds, and provide you with a stable income source. FD is one of the best investment avenues for you if you have a low risk-taking appetite.
So, if you are considering investing in FD, you can open a Fixed Deposit account with AU Small Finance Bank. It is known to offer a high interest rate of up to 8.50%* p.a. Thus, you can be sure to get valuable returns from your investment, and if you are nearing retirement or just retired, it can provide a regular income and help you be financially independent.
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How to Diversify Your Investment with Fixed Deposits?
When you open an FD account with AU Small Finance Bank, you have the flexibility to choose the investment tenure, interest payout period, and investment amount. You can leverage these benefits to diversify your investment portfolio. Here is how:
- The maximum tenure for FD is ten years but you can invest in more than one Fixed Deposit scheme with different investment tenures. This strategy allows you to leverage the benefit of changing interest rates and maintain liquidity in your portfolio.
- When you open an FD account with AU Small Finance Bank, you have the option to choose the interest payout term. It could be monthly, quarterly, or at maturity. This gives you the option to get regular income and maintain a steady cash flow.
- It is advisable to invest in different FD schemes with staggered maturity dates. The approach will allow you to reinvest the FD at higher interest rate if the interest rate rises. At the same you can be assured of having cash liquidity.
- You can invest in tax-saving FDs that provide tax benefits under Section 80C of the Indian Income Tax Act, 1969. This will not only help you reduce your overall annual tax burden but also contribute to your diversified investment portfolio.
How to Open FD Account with AU Small Finance Bank?
You can open an FD Account with AU Small Finance Bank online using the video KYC (Know Your Customer) facility of video banking. It allows you to video call the bank’s representative and initiate the account opening process.
However, to get on a video banker, you must fulfil the following requirements:
- You must be at least 18 years old.
- You must have a smart mobile device with good internet connection.
- You must have good lighting in the room for the video call.
- You must keep your original PAN card, a blank paper, and a pen handy.
- Mobile number should be linked to Aadhaar Card.
To Conclude
Building a diversified investment portfolio with FD is a great way to give your portfolio some stability and optimise returns. By investing in FDs with different tenures and interest payout options, you can have a secure investment strategy. Make sure that you regularly monitor the FD interest rate to leverage its benefits and ensure long-term financial growth.
*For Resident Indian Senior Citizens on Fixed Deposits tenure of 18 Months. Rates are subject to change at the sole discretion of AU Small Finance Bank. For latest rates, please visit www.aubank.in. Terms and Conditions apply.
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