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Elaborate on the importance of investing in fixed deposits.

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Importance of investing in fixed deposits.

  • Interest is earned at a fixed rate regardless of changes in the economic climate.
  • The period of investment can be over a short/medium/long term.
  • Ensures financial discipline as investors cannot withdraw their funds before the maturity date.
  • Investors can choose the investment period that suits them.
  • Investors earn a better return on investment than on an ordinary savings account.
  • Principal amount plus interest earned is paid out on the maturity date.
  • It has a low risk as investors are guaranteed of the final payment.
  • The higher the principal amount/The longer the investment period, the higher the interest rate offered by a financial institution.
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