Fixed deposits: how they work and their benefits

Fixed deposits: how they work and their benefits

Currently there are many ways to increase your savings , most of which are guaranteed to give you a higher return. Fixed deposit is such a popular investment.

One of the benefits you can enjoy is that HNB FINANCE’s fixed deposit facility offers the opportunity to reap greater benefits compared to the fixed deposits of other financial institutions in Sri Lanka. Before learning about the other major benefits , let us first understand how a fixed deposit works.

How does a fixed deposit work?

Simply put, a fixed deposit (as agreed in advance by the person concerned and the financial institution) is an investment that guarantees a stable return after a certain period of time. This return is calculated based on the investment period along with interest.

A fixed deposit is a safe investment to get a higher return due to the guarantee of income.

The benefits of starting a fixed deposit

Below are some of the key benefits of choosing a HNB Financial Company to invest in a fixed deposit.

High interest rates

Naturally a fixed deposit is a tool that offers you higher interest rates that give you better returns. However, HNB FINANCE’s interest rates are recognized as the best interest rates in the country, available on a monthly, yearly or maturity basis. Also, if you are a senior citizen you are entitled to an additional 0.5% interest on your investment. In short, your income is actually higher than any other financial institution in Sri Lanka.


A fixed deposit is provided with insurance in order to ensure that the person (investor) receives his or her income. Your deposit amount will be Rs. Up to 600,000 are insured through the Sri Lanka Deposit Insurance Scheme. In addition, HNB FINANCE is nationally certified ‘AA- (lka)’ by Pitch Ratings. This certificate refers to the security of fixed deposits.

Low alert

Due to the security nature of fixed deposits, your income will not be affected by external forces such as the stock market as you operate with a guarantee of a fixed deposit and a guarantee of a fixed interest rate until the end of your deposit period. In short, the risk of misfortune in relation to the benefit of a fixed deposit is very low.

Savings and budgeting habits are encouraged

Whether you realize it or not , a fixed deposit acts as a constant incentive to save the money you have worked so hard for. Due to the existing cash flow and low risk , a fixed deposit also acts as a final lender. In other words, you can withdraw your fixed deposit before maturity if you have the opportunity to make a significant payment. Of course , you will have to pay a penalty and other fees , but this will be a very small amount. In short , it encourages the habit of saving.

Flexible time selection system

Fixed deposits can be made within a flexible ‘time period’ according to your preferences. Although this is for a period of 12 to 60 months you can choose the period for your fixed deposit through HNB FINANCE to withdraw your income at any time. Unlike other investment alternatives, the investment period in fixed deposits is flexible.

Borrowing the deposit amount as collateral

HNB FINANCE’s offer of the opportunity to get a loan by pledging your deposit is considered a unique service of the company. Loans up to 90% of the deposit amount can be availed at low interest rates.

In short, HNB FinanCE in particular not only ensures high returns through a fixed deposit account, but also ensures security, flexibility and access to effective credit facilities without any major risk.

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