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Fixed deposits or Liquid funds: Where to park your surplus for steady returns

FDs, which are also termed called term deposits, is one of the most common and preferred investment avenues for many. Besides earning interest you can get a tax benefit if it is kept for 5 years or more. “Fixed deposits are a handy way to make sure we earn that little bit extra instead of leaving the money lying around in a savings account,” said Kunal Bajaj is CEO & founder of FDs are one of the safest investment options. “The Deposit Insurance and Credit Guarantee Corporation (DICGC) automatically insures you up to Rs 1 lakh per customer across all branches of the same bank. But this overall limit applies to all your balances with the bank – savings accounts, current accounts, as well as Fixed Deposits,” said Bajaj. “You have the flexibility to redeem your money within just one working day with no penalties for early withdrawal, and the convenience of switching your money into other mutual funds as and when you feel like,” said Bajaj.