Hi,
According to my research and understanding, FDs are relatively low risk, but CDs can offer better returns.
What is a Certificate of Deposit?
A Certificate of Deposit (CD) is a type of investment issued by banks and other financial institutions. They offer fixed interest rates on the amount invested, which are frequently higher than FD rates.
What is a Fixed Deposit?
Fixed deposits, on the other hand, are among the most well-liked forms of investing in India. A fixed deposit account offers a guaranteed rate of return on your initial investment.
Comparison
Compared to bank FDs, CDs offer a greater interest rate. Since CDs carry more risk than bank deposit plans, they have higher interest rates. The return on CDs is typically higher. However, money held in CDs won't increase as much when rates are low. Since it's possible to lock in investments at one rate only to see rates rise, CDs pose an interest rate risk.
Both CDs and FDs have advantages and disadvantages of their own. Your investment amount, time horizon, and level of risk tolerance will all play a major role in the one you choose. Consider investing in a CD to achieve your short-term financial objectives if you have a short investment horizon and are ready to take on some risk.
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I hope this helps:)
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Why are CDs risk-free than FD?
B.b
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2023-06-30T09:00:58+00:00 2023-06-30T12:40:50+00:00Comment
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