When it comes to investing money, a lot of issues arise, such as which investment vehicle provides the highest returns, what level of risk is involved, how long the investment will take to mature, and so on. Everyone wants to spend their hard-earned money in a way that provides the best return in the shortest amount of time with the least amount of risk. Some people invest for financial stability, while others do so to fulfil their financial objectives. An investor can choose from a variety of vehicles, including Kisan Vikas Patra and fixed deposits.
Each of these securities promises attractive returns, but investors must choose which is best for them. Let's have a look at how these instruments compare to one another.
1.Kisan Vikas Patra (Kisan Vikas Patra)
The Indian Post's certificate system promises to double a one-time investment in around ten years (124 months). It's commonly referred to as KVP. The current interest rate on offer is 6.9% per year compounded. Kisan Vikas Patrawas was originally designed to help farmers save for the future, but it is now open to everyone. This one is best for risk-averse investors because it guarantees a certain amount at maturity. The returns, on the other hand, are fully taxable.
KVP certifications are divided into three categories. A 'Single Holder Type Certificate' is given to a single person. The 'Joint A Type Certificate' is given to two people, and it is payable to both of them or to the survivor. The 'Joint B Type Certificate' is payable to the survivor or either of the two holders.
2. Fixed Deposit with Bank
FD accounts are a popular way to save money since they are not subject to market fluctuations and offer a guaranteed, steady interest rate. The interest rate on a fixed deposit is substantially greater than that on a savings account. Investors can either withdraw their money or reinvest it when the period of the deposit expires. Regular FD accounts for persons under the age of 60, FD accounts for elderly citizens, tax-saving FD accounts, FD accounts with monthly payout (interest is paid every month and is not compounded), and so on. The interest rates and maturity periods offered by various institutions vary however generally persons under 60 will get interest around 6% for Fixed deposits having a tenure of 10 years.