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A Fixed Deposit Account May Be for You

People are always looking for ways to make more money with the money they currently have. Investing is one answer, but many do not care for the risk involved and the interest rates currently being paid on traditional US savings and CD accounts is nothing short of abysmal. These conditions have led to a rise in popularity of fixed deposit accounts with overseas banks and American investors are sending their dollars across the ocean in record numbers to tak advantage of the higher interest rates on fixed deposit accounts from banks based in India, the UK, Scotland, and other nations.


A fixed deposit account is similar to a CD account. The funds are deposited for a specified amount of time and earn interest during that period. There are some differences between a CD and a fixed deposit that make the latter choice of particular interest to investors. The first major difference is the interest rate. A fixed deposit account based in Scotland, for example, was advertised online as paying a rate of just over two percent for a one year deposit of ten thousand dollars, American. A one year CD in the US for that amount typically earns between one and one point five percent, depending on the bank. Most fixed deposits assess penalties for early withdrawal, just like CDs, but a feature of many fixed deposit accounts is the ability to borrow against your deposit if needed.

Of course there are downsides to fixed deposit accounts as well. First of all, because they are offered overseas, the accounts lack FDIC protection. It may be necessary to convert American dollars into foreign currency before opening the account, and Americans may need to familiarize themselves with the banking regulations of another nation before feeling secure in opening an overseas fixed deposit account.

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