Why Fixed deposit account is better than a savings account

Posted by Chidinma on Wednesday October 8, 2014 at 16:14:36:

A fixed deposit account as the name implies is an account in which the amount deposited is fixed for a period of time before it can be withdrawn. Though this type of account is not as popular as the savings account, more people are beginning to know the benefits of a fixed deposit account.

A fixed deposit account is usually opened with a large amount as opening balance; Some banks in Nigeria collect as high as N150,000 to N500,000 as opening balance for fixed deposit account and this is one of the reasons why some people shy away from opening such an account.

For this article, I will state reasons why fixed deposit account is better than a savings account:

1. Interest Rate: This is one of the major
benefits that come with a fixed deposit account. The account holders are paid a percentage as interest on their money making it a good source of investment, since you are guaranteed your interest payment as long as your money stays in the account for the agreed period of time.

2. Access To Loan: Fixed deposit account holders can easily access loan facility in the bank than a savings account holder. This is because, a bank will easily release money to a customer who opens with N500,000 and leaves it in the account for a period of over 5 months without placing a withdrawal than to another person who has a savings account with just N5,000 which the person withdraws as soon as the money gets into his account.