FD vs Life Insurance Plans: Which is Right for You?
Fixed Deposits (FDs):
- Security: Safe with guaranteed returns.
- Interest Rates: Fixed, higher than savings accounts.
- Liquidity: Fixed tenure, but early withdrawal possible with a penalty.
- Taxation: Interest earned is taxable.
Life Insurance Plans:
- Protection & Savings: Offers financial protection and savings for future goals.
- Variety: Includes term plans, endowment plans, and ULIPs.
- Tax Benefits: Premiums are tax-deductible under Section 80C; death benefits are tax-free under Section 10(10D).
- Long-Term Growth: ULIPs provide market-linked returns.
Which to Choose?
- For Safety: FDs for low-risk, fixed returns.
- For Protection & Growth: Life insurance for financial security and long-term wealth.
Conclusion: Choose based on your financial goals, risk tolerance, and investment horizon. Combining both can provide balanced financial planning.
