Every individual should have a well balanced portfolio. A balanced portfolio is a combination of low, medium and high risk assets that will help you achieve your long term financial goals. If you are however, given a choice as to which is better- property or fixed deposit, in this blog we will provide you good insights about investment. Investing in low rise independent floors in Gurgaon is certainly a good option.

Fixed Deposit as an Investment Option

The fixed deposits will offer you a higher rate of interest in comparison to the normal savings account. In this investment type, the fund is locked for a particular time frame. In India the fixed deposit rates in the public sector banks ranges between 4 and 7 per cent. There are however some foreign banks that might offer a rate of around 9 per cent. In case the interest coming from the fixed deposit is more than Rs.40,000, there is a tax of 4 per cent that needs to be paid on the interest. The FD provides you with a stable interest rate on the amount that has been deposited. Therefore, this is a perfect choice for investors who want to invest in low risk returns.

Real Estate as an Investment Option

Investment in Real estate continues to be quite an attractive choice. This is supported by the resilience of the sector and also its potential in the long term. Most Indians also have a dream of buying a house and this dream further fuels the demand of Real Estate. Even after the COVID, the real estate industry was the first to recover. Apart from this, rising disposable incomes, urbanisation and prioritising luxury and convenience are the factors that make this investment quite an attractive option.

There are several forms of tax that you will have to pay if you invest in real estate. The Income Tax Act, however allows the home buyers some lucrative claims that might range up to Rs. 3.5 lac in a year. 

How to choose the best Investment Option?

When you are considering investment in Real Estate or Fixed Deposits, it is important for you to understand the concept of liquidity as well as the timeline of the investment. These factors play a very important role to determine the better investment option to achieve one’s financial goals.

Understanding Liquidity

Liquidity means how quickly and easily you can convert an asset into cash with affecting the market price. Real Estate investments are generally less liquid in comparison to the other asset classes. For example, you might take several months to sale a property. Since you cannot liquidate real estate easily, so it is not a very ideal option for investors who are interested in accessing quick funds. Fixed Deposits on the other hand, have higher liquidity. Though it is time bound, however, most banks allow a premature withdrawal with some penalty. It is this feature that makes the FDs more suitable for the investors who need funds in a short notice.

Understanding the Time Frame of the Investment

This refers to the timeline up till which the investor is ready to hold an investment before they will require the capital. For those investors who are interested in short term investments, FDs are a better option for them. Moreover, FDs also provide you with a Capital Security and fixed return over a certain period of time that has been predetermined. This does not have the uncertainties and the complexities of Real estate.

Real estate investments on the other hand are typically more aligned with long term goals. If you are interested in investing over the long term, real estate can offer you with substantial returns on investment through rental income and value appreciation at the same time. It is perfect for those investors who do not need to liquidate it immediately and can wait for the right market conditions to sell or lease their property.

Conclusion

Choosing between FD and Real estate investment can be quite a tricky choice. If the investor wants to invest for the long term and get very good returns on investment, Real estate is the correct choice. On the other hand, if he is interested in small yet steady income, FDs are a better choice. If you are looking to invest in Real Estate, builder floor for sale in Gurgaon is something that you can look for.