No doubt, the risk involved is less when you invest in banks than in the stock market. But remember, low risk does not mean no risk at all. So read on to find out what low risk really means.
Low Returns
To protect your money, you might choose to stick with safe investments. But everybody knows that the safer you play, the less returns you can expect. And yet you probably think it is worth it because 'at least' you are not going to lose anything.
| Also Read: Too Many Investments, Too Little Returns |
But what you might not realise is that no matter how safe an investment might be, it can never be completely risk-free. There is always some chance of you losing your money.
Keep FDs under 1 lakh
Fixed deposits give you approximately 8 to 10% interest p.a., which is not much in comparison to other investments. So you would rather invest elsewhere. But if you still want to keep some amount in FDs, make sure it does not exceed Rs.1 lakh.
If the bank where you invest was to go bankrupt, FDs up to Rs.1 lakh are insured. So you won't lose that money.
| Also Read: Why Fixed Maturity Plans are Better Than FDs |
If you want to invest more than Rs.1 lakh in FDs, spread your investments across various banks or different branches of the same bank. Always opt for recognised, well-established banks. Public sector banks are the most secure. Then come co-operative banks followed by regional and rural banks.
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