We all have a desire to travel and explore the world in our own way, and we often tend to put it under the carpet. This is because we think our income or savings will fall short of meeting the expenses and can derail our financial well-being.
However, this does not hold true, and you can easily fund your travel plans through smart and planned investments without affecting your regular savings.
And, investing in an FD is the most appropriate method to fund your travel goals. Here are some of the benefits of choosing fixed deposits to plan your vacation:
Attractive interest rate
Compared to the normal savings bank account, fixed deposits offer a higher rate of return on deposits, which makes it an attractive option. Further, interest rates are compounded annually; this helps in accumulating wealth more rapidly.
Also, it is important to note that FD schemes offered by HFCs/NBFCs, also known as company deposits, offer higher FD rates in India. For example, PNB Housing Ltd., India’s 2nd largest deposit-taking HFC, offers comparatively higher interest rates than most banks.
Guaranteed Returns
As fixed deposits are independent of any market-related volatility or external factors, the FD returns are assured and risk-free. The FD status at maturity is intimated by the bank or financial institution at the time of opening the FD account. This helps in planning your vacation accordingly well ahead of time.
Must Read: What Are The Features And Benefits Of Fixed Deposit Account?
Flexible Tenure
Another reason why fixed deposits are an ideal option for vacation planning is its flexible tenure feature. The tenure for FD with PNB Housing ranges from 12 months to 10 years, which helps to lock-in your deposits as per your requirement.
For example, if you are planning to go for a foreign trip in 3 years from now, then you can make a deposit for 36 months and build enough corpus to meet your travel expenses.
Flexible Investment Amount
A fixed deposit investment can be started with an amount as low as Rs 10,000, and there is no upper limit. Therefore, it is a suitable investment option for both types of travel plans, whether it is a short budget trip or regular vacation.
Instant Access to Funds
The financial planning for your vacation starts well in advance, almost 1 to 2 years before the scheduled date. And, generally, the actual date of travel and reservations are not finalized so much in advance. Therefore, it is important to invest in an option where you get the benefit of assured returns as well as instant access to funds.
This is where an FD does the job. It not only guarantees assured returns but also provides instant liquidity to fulfil your vacation requirements. Also, you remain aware of your FD status all the time.
A perfect vacation requires effective planning, right from arranging finances to taking care of all the logistics to make it a memorable and beautiful experience. And, planning it with fixed deposit investment is the best way to start with and make your dream vacation come true.
