ARE FIXED DEPOSITS BETTER THAN SAVINGS ACCOUNTS?

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Most people are used to Savings accounts and miss out on the benefits of having a Fixed Deposit. While it is easy to open a savings account and operate it, Fixed Deposit is an investment, that comes with lower risks than shares, bonds etc.

Savings accounts require that you open an account and constantly make deposits into that account, Fixed Deposit requires you deposit an agreed amount for an agreed period at a particular interest rate. It is a financial tool for individuals or corporates looking to earn interests on their investments over a specific period.

Here are a few reasons why it is better to invest your money in a Fixed Deposit account than hold I in a savings account;

  1. Interest rates offered on Fixed Deposits are higher than interest rates offered on Savings accounts. Rates offered by different banks vary, however one of the highest in the Nigerian banking industry is RenMoney’s Fixed Deposit rate. RenMoney offers up to 22% p.a interest rates on deposits in a RenMoney Fixed Deposit account.

  2. If you have a substantial amount of money in your savings account, you can take it out of your savings account and earn more money with it by investing the money in a Fixed Deposit account.

  3. Also, If you do not have a credit history and want to access a loan, you can use a Fixed Deposit as collateral to secure the loan or to assure lenders that you can make repayments when due.

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