{"id":12607,"date":"2023-05-05T13:17:03","date_gmt":"2023-05-05T07:47:03","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=12607"},"modified":"2023-05-05T13:17:19","modified_gmt":"2023-05-05T07:47:19","slug":"fixed-deposit-vs-life-insurance","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/","title":{"rendered":"Fixed Deposit Vs Life Insurance &#8211; Which Is Better For You?"},"content":{"rendered":"\n<p>If you want to <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> in India, two options that you\u2019ll probably come across quite often &#8211; fixed deposit and life insurance. Both investment options offer safety and assist in wealth creation, which is expected from every investment mode.&nbsp;<\/p>\n\n\n\n<p>In this blog, we will explore which investment mode is best for you &#8211; fixed deposit or life insurance.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Fixed-deposit-vs-life-insurance\" title=\"Fixed deposit vs life insurance\">Fixed deposit vs life insurance<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Key-difference\" title=\"Key difference \">Key difference <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Advantages-of-investing-in-fixed-deposit\" title=\"Advantages of investing in fixed deposit\">Advantages of investing in fixed deposit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Advantages-of-investing-in-life-insurance\" title=\"Advantages of investing in life insurance\">Advantages of investing in life insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Types-of-fixed-deposits-to-invest-in-India-2023\" title=\"Types of fixed deposits to invest in India (2023)\">Types of fixed deposits to invest in India (2023)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Types-of-life-insurance-plans-available-in-India-2023\" title=\"Types of life insurance plans available in India (2023)\">Types of life insurance plans available in India (2023)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#FD-vs-Life-Insurance-%E2%80%93-Which-is-better\" title=\"FD vs Life Insurance \u2013 Which is better?\">FD vs Life Insurance \u2013 Which is better?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#FAQs\" title=\"FAQs\">FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#What-is-the-minimum-investment-tenure-for-a-fixed-deposit-account\" title=\"What is the minimum investment tenure for a fixed deposit account?\">What is the minimum investment tenure for a fixed deposit account?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Can-I-withdraw-money-from-a-fixed-deposit-account-in-the-case-of-a-financial-emergency\" title=\"Can I withdraw money from a fixed deposit account in the case of a financial emergency?\">Can I withdraw money from a fixed deposit account in the case of a financial emergency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#What-are-the-tax-benefits-associated-with-a-life-insurance-policy\" title=\"What are the tax benefits associated with a life insurance policy?\">What are the tax benefits associated with a life insurance policy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#What-is-the-primary-difference-between-fixed-deposit-and-life-insurance\" title=\"What is the primary difference between fixed deposit and life insurance?\">What is the primary difference between fixed deposit and life insurance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/fixed-deposit-vs-life-insurance\/#Can-I-take-a-loan-against-my-fixed-deposit\" title=\"Can I take a loan against my fixed deposit?\">Can I take a loan against my fixed deposit?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fixed-deposit-vs-life-insurance\"><\/span><strong>Fixed deposit vs life insurance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The key difference between fixed deposits and life insurance is that fixed deposits are designed to meet your investment needs. In contrast, life insurance is meant to provide financial security to your family if something happens to you.&nbsp;<\/p>\n\n\n\n<p>When comparing these options, it&#8217;s important to consider your investment goals. For example, fixed deposits are suitable for short-term and long-term investing goals, whereas life insurance is best for long-term goals.&nbsp;<\/p>\n\n\n\n<p>Additionally, it&#8217;s worth noting that you can predict your returns with fixed deposits. Still, with some life insurance plans, like ULIPs, returns are subject to market changes and cannot be accurately estimated beforehand.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key-difference\"><\/span><strong>Key difference <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Particular<\/strong><\/td><td><strong>Fixed Deposit<\/strong><\/td><td><strong>Life Insurance<\/strong><\/td><\/tr><tr><td><strong>Tenure<\/strong><\/td><td>7 days to 10 yrs<\/td><td>Flexible tenure of 1 week to 10 yrs<\/td><\/tr><tr><td><strong>Minimum investment<\/strong><\/td><td>\u20b91,000<\/td><td>Varies from plan to plan<\/td><\/tr><tr><td><strong>Returns<\/strong><\/td><td>Guaranteed returns<\/td><td>Returns declared at the end of the year<\/td><\/tr><tr><td><strong>Lock-in Period<\/strong><\/td><td>3 months<\/td><td>3-5 yrs<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages-of-investing-in-fixed-deposit\"><\/span><strong>Advantages of investing in fixed deposit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are the benefits of investing in a fixed deposit &#8211;<\/p>\n\n\n\n<ul><li>You can invest your money for a fixed period.<\/li><li>Offer higher interest rates compared to regular savings accounts.<\/li><li>Earn even higher returns if you do not withdraw your investment before maturity.<\/li><li>Withdraw your investment prematurely in case of a financial emergency.<\/li><li>The choice to receive interest payments at maturity or on a monthly\/annual basis, depending on the term.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages-of-investing-in-life-insurance\"><\/span><strong>Advantages of investing in life insurance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are the benefits of investing in a life insurance policy &#8211;<\/p>\n\n\n\n<ul><li>Provides financial protection in case of unforeseen events like the policyholder&#8217;s death, ensuring financial stability for the family.<\/li><li>Typically last longer than the premium payment term.<\/li><li>Choose from various life insurance products, including <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-buy-term-insurance-in-your-20s\/\">term insurance<\/a>, endowment, ULIP, money back, retirement, and child life plans, depending on your coverage needs.<\/li><li>Enjoy tax exemptions under Section 80C and 10(10D) of the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax\/\">Income Tax<\/a> Act with a life insurance policy.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types-of-fixed-deposits-to-invest-in-India-2023\"><\/span><strong>Types of fixed deposits to invest in India (2023)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The different types of fixed deposits available in India are &#8211;&nbsp;<\/p>\n\n\n\n<ul><li><strong>Standard fixed deposit<\/strong><\/li><\/ul>\n\n\n\n<p>A standard fixed deposit scheme is a traditional insurance plan, commonly available across all banks in India. It includes a predetermined <a href=\"https:\/\/www.tickertape.in\/blog\/flat-interest-rate-vs-reducing-balance-interest-rate\/\">interest rate<\/a> for a fixed tenure ranging from 7 days to 10 yrs with higher rates than a savings account.<\/p>\n\n\n\n<ul><li><strong>Tax-Saving fixed deposit<\/strong><\/li><\/ul>\n\n\n\n<p>Tax-saving fixed deposits are available in almost all banks and provide tax benefits up to Rs. 1.5 lakh per year. These fixed deposits have a lock-in period of five yrs and allow only one-time lump sum deposits.<\/p>\n\n\n\n<ul><li><strong>Special fixed deposit<\/strong><\/li><\/ul>\n\n\n\n<p>Like traditional fixed deposits, these funds are also invested for a set duration. However, the distinguishing feature of special fixed deposits is that if you don\u2019t withdraw the money during the specified tenure, you will earn a higher interest rate than standard fixed deposits.<\/p>\n\n\n\n<ul><li><strong>Regular income fixed deposit<\/strong><\/li><\/ul>\n\n\n\n<p>For individuals who rely on bank deposit interest to cover their monthly expenditures, this kind of fixed deposit is the most suitable option. Under regular income fixed deposits, you can choose between receiving interest payouts monthly or quarterly.<\/p>\n\n\n\n<ul><li><strong>Senior citizen fixed deposit<\/strong><\/li><\/ul>\n\n\n\n<p>The senior citizens&#8217; fixed deposit scheme is for those over 60 yrs. It offers higher interest rates, about 0.50% above regular rates, and has flexible tenures.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types-of-life-insurance-plans-available-in-India-2023\"><\/span><strong>Types of life insurance plans available in India (2023)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The different <a href=\"https:\/\/www.tickertape.in\/blog\/types-of-life-insurance\/\">types of life insurance<\/a> policies available in India are &#8211;<\/p>\n\n\n\n<ul><li><strong>Retirement plans<\/strong><\/li><\/ul>\n\n\n\n<p>Retirement plans are designed to build a corpus for post-retirement days, offering the potential to accumulate significant wealth. In addition, retirement plans offer tax-free returns on maturity and multiple withdrawal options like regular income or lump sum payments.<\/p>\n\n\n\n<ul><li><strong>Child insurance plans<\/strong><\/li><\/ul>\n\n\n\n<p>A child insurance plan is a financial planning tool for parents to build a corpus for their <a href=\"https:\/\/www.tickertape.in\/blog\/5-investments-for-childrens-future\/\">child&#8217;s future<\/a>. It provides maturity benefits and insurance coverage for the parent. In addition, parents can choose how and where the money is invested, and child plans offer dual tax savings under Section 80C and 10(10D) of the Income Tax Act of 1961.<\/p>\n\n\n\n<ul><li><strong>Whole life insurance<\/strong><\/li><\/ul>\n\n\n\n<p>Whole life insurance provides life coverage for 99 yrs, making it ideal for those with long-term dependents. In addition, it offers stability with guaranteed income on maturity and tax-free returns.<\/p>\n\n\n\n<ul><li><strong>Money-back insurance policy<\/strong><\/li><\/ul>\n\n\n\n<p>Money-back plans offer regular payouts at steady intervals, making them ideal for meeting short-term financial goals. This plan provides increased liquidity and the benefit of a lump sum payout at maturity. In addition, the regular payouts are tax-free and start immediately after the premium payment term ends.<\/p>\n\n\n\n<ul><li><strong>Endowment plans<\/strong><\/li><\/ul>\n\n\n\n<p>Endowment plans offer guaranteed returns and <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-insurance-coverage\/\">life insurance coverage<\/a>, with a lump sum payout on maturity and death benefit for nominees. Flexible premium payment methods and bonus payouts are also available. In addition, returns on maturity are tax-free, and premiums can be claimed as deductions under Section 80C.<\/p>\n\n\n\n<ul><li><strong>Unit Linked Insurance Plans (ULIPs)<\/strong><\/li><\/ul>\n\n\n\n<p>A <a href=\"https:\/\/www.tickertape.in\/blog\/best-ulip-plans-india\/?utm_source=blog&amp;utm_medium=article\">Unit Linked Insurance Plan<\/a> (ULIP) offers life cover and investment opportunities with the potential for market-linked returns. With a 5-yr lock-in period, ULIPs allow for investment in bonds, equities, and <a href=\"https:\/\/www.tickertape.in\/blog\/top-hybrid-funds\/\">hybrid funds<\/a>, with flexible investment options and the ability to alter your investment strategy. They also provide partial withdrawals, fund-switching, and tax-free maturity amounts.<\/p>\n\n\n\n<ul><li><strong>Term insurance plans<\/strong><\/li><\/ul>\n\n\n\n<p>Term insurance is vital to financial planning for the primary wage earner, providing affordable financial protection. Premiums are lower than other life insurance products, making it accessible. The cover can be used for daily expenses, education, or outstanding debts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FD-vs-Life-Insurance-%E2%80%93-Which-is-better\"><\/span><strong>FD vs Life Insurance \u2013 Which is better?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The choice between fixed deposits and life insurance depends on your specific needs. For example, fixed deposits may be your best option if you seek returns due to their interest rates. However, a life insurance plan can provide a financial safety net for you and your family if you want to manage risk.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1683272550862\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What-is-the-minimum-investment-tenure-for-a-fixed-deposit-account\"><\/span><strong>What is the minimum investment tenure for a fixed deposit account?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The minimum investment tenure for a fixed deposit account is seven days.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1683272556828\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Can-I-withdraw-money-from-a-fixed-deposit-account-in-the-case-of-a-financial-emergency\"><\/span><strong>Can I withdraw money from a fixed deposit account in the case of a financial emergency?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>You can withdraw money from your fixed deposit account prematurely in case of a financial emergency after notifying your bank.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1683272594098\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What-are-the-tax-benefits-associated-with-a-life-insurance-policy\"><\/span><strong>What are the tax benefits associated with a life insurance policy?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>You can avail of tax benefits under sections 80C and 80D of the Indian Income Tax Act, 1961, by purchasing a life insurance policy.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1683272607056\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What-is-the-primary-difference-between-fixed-deposit-and-life-insurance\"><\/span><strong>What is the primary difference between fixed deposit and life insurance?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>While a fixed deposit is an investment product designed for savings, life insurance is an insurance product that provides risk coverage and helps with savings.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1683272613129\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Can-I-take-a-loan-against-my-fixed-deposit\"><\/span><strong>Can I take a loan against my fixed deposit?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, you can take a loan against your fixed deposit.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Discover the best investment option for you! Read our blog comparing fixed deposit vs life insurance in India.<\/p>\n","protected":false},"author":131,"featured_media":12608,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[1],"tags":[],"acf":[],"modified_by":"Harshit Singh","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2023\/05\/fixed-deposit-vs-life-insurance.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/12607"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=12607"}],"version-history":[{"count":3,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/12607\/revisions"}],"predecessor-version":[{"id":12611,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/12607\/revisions\/12611"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/12608"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=12607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=12607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=12607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}