Are you confused about where to invest your money? There has always been a dilemma about where to invest in Fixed Deposits vs Real Estate to grow your investment. These investments have their own merits and demerits, which have their risks and returns. Let’s take a closer look at these investments to help you decide where to invest in Fixed Deposits (FD) or Real Estate:
What is FD?
FD is a safe and easy method that allows an individual to deposit money with higher returns until maturity. People think FD investment is a secure investment with higher returns.
Why Choose FD?
Below are a few features of how FD can be better than Real Estate investment:
Fixed Returns:
FD offers fixed returns, providing predictable earnings. Unlike stocks, FDs are not affected by market ups and downs.
Safe Investment:
FDs are at the lowest risk of market ups and downs, making them a secure investment.
Flexible Time:
You can choose the deposit period, which can be 7 to 10 years depending on your needs.
Premature Withdrawal:
You can withdraw your FD before maturity, though you may have to pay the penalty.
Tax Saving:
A 5-year tax-saving FD qualifies for deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh per year.
Senior Citizen:
Senior Citizens above 60 often have higher interest returns
Flexible Returns:
These FDs are linked with savings and current accounts. So, you can withdraw funds whenever needed.
What is Real Estate Investment?
Real Estate is buying a home and making money; it can be a residential property, commercial property, or an open-plot investment. An investment in Real Estate combines growth with income-generating rental properties.
An investment in Real Estate combines growth with income-generating rental properties.
Why choose Real Estate?
Real Estate has been a source of wealth for centuries. But is it the right choice for you?
High Returns:
Investing in Real Estate in India, especially in metro cities like Hyderabad and Mumbai, has consistent growth. For example, investing in projects like NS Homes by Flivv Developers can give excellent appreciation over time.
Earnings passively:
Rental income from Real Estate can generate passive income for you.
Shield Against Inflation:
Real Estate is a safer and longer-term investment, and property value increases over time.
Tax Benefits:
Investors get tax benefits such as deductions on mortgage interest, property taxes, and depreciation.
Can Foreigners Buy Property in India?
Yes, but there are a few restrictions and guidelines by FEMA on buying land in India. Some specific restrictions are linked to the residency status. Foreign nations cannot purchase agricultural land, plantations, property, and farmhouses in India. However, they can purchase residential and commercial properties.
Fixed Deposits (FDs) vs Real Estate: Risk Factors
We hope you know that there is no investment without risks.
Fixed Deposits (FDs):
FDs are at low investment risks and are safe as FDs have low returns, which can’t meet long-term goals. Moreover, premature withdrawal will hurt with penalties.
Real Estate:
The upfront investment is required in Real Estate. Additionally, transactions of properties can be time-consuming. It’s not as liquid as FDs, also, legalities and legal disputes are the other issues.
Which One Should Be Selected: Fixed Deposits or Real Estate to Invest in?
It depends on the financial priorities of what to choose, either fixed deposits or Real Estate.
- If you want short-term, safe returns, then you can go for fixed deposits (FDs).
- If you are looking for long-term investments with high returns and passive income from rents.
By diversifying the risks and rewards between Fixed Deposits and Real Estate, you will be able to balance and help the risks and rewards.
Quick Comparison: Fixed Deposits (FD) vs Real Estate Investment:
Conclusion:
So, if you’re still wondering which is better, Fixed Deposits or Real Estate? However, it’s not about which one is better; it is about which one fits you well. If you are okay with low returns and safer investments, then you can go for Fixed Deposits. If you are planning for longer-term investments with higher returns and can wait patiently, then you can go for Real Estate investments.
