Understanding and comparing the Fixed Deposits and their rates

Published: 26th February 2011
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There are different ways in which people can invest money. For investing, there are two types of decision criteria which are considered by the people. These are that of the returns and the safety of their hard earned money. The people develop their investment portfolios on the basis of the varied mixed of these criteria only. The ones seeking safer returns would like to invest in those areas which give guaranteed returns, even if the returns are low. Some others might prefer to take more risks and try for a higher return. The fixed deposits are one of the safer avenues of investments and form an important part of the investment portfolio.



The fixed term deposit rate is usually lower since the assured returns are provided to the investors. The assurance is given for the minimum possible rate which the financial institute believes can be given to the investors under all the circumstances. The rate is more than the savings account since the money kept in the latter can be withdrawn on demand whereas the money invested in the fixed term deposit instruments is kept invested for a fixed period of time.



These high interest bank accounts form an important part of the portfolio creation. In a portfolio type of investment there are varied mixes of different types of investment. This spreads the risk to different investment avenues and also guarantees a specific return to the customer. There could be a number of different investment avenues like equities, real estate, term deposits, mutual funds, etc. Then, within these, there can be further divisions. The primary objective of using fixed term deposit account is to have a stabilizing influence on the returns.



Since the money will remain locked in for a specific period of time, the people keep only that much in these accounts which they can afford to part with. This is the sum which they do not require for that specified period of time. The fixed deposit can be classified in terms of the time period of maturity. These could be for a few months or up to 5 years. Another classification could be on the basis of the type of interest rates that these carry. Most of these carry a fixed return, but there can also be a term deposit of the variable rates.



There are many institutions which provide the fixed term deposit account facility. You can find these conveniently over the internet. Furthermore, you can also compare the fixed term deposit rates Australia from the different institutions and select the one which gives you the best returns. Most often, the comparison parameters are the term of the deposit, the rate of interest as well as the benefits and features of the deposit. The comparison shall not be restricted to the interest rates only but shall also be done for the minimum monthly balance required, whether the finds can be made available on call, when are the interest rates going to be paid and whether the interest is calculated daily or not.




About Author:

This article is written by Term Deposit which is a licensed securities dealer regulated by the Australian Securities and Investment Commission (ASIC).It is designed to help you find the fixed term deposit account in Australia.



For information on fixed deposit you can visit us at: http://www.termdeposit.com/


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