Why Fixed Deposit ??
Fixed deposit is chosen by investors over any other option in most of the cases because it is safe and gives a higher interest rate. One also gets to save taxes if he invests in FD because of section 80c. It is used as a saving option for some and a wealth gaining option for others.
The interest rates can go as high as 9% and are liable to changes as per the market trends, but the good thing is that you will get the same percentage of interest at which you applied for at the time of investment. So, you do not get affected by the market trends once you have invested the interest rate remains the same throughout the tenure.
Are you an Ideal investor for FD?
Almost all banks India gives you an option to apply for FD. Any resident, NRI, Organisation/Firm can apply for an FD.
Fixed deposit are good for people who have some extra amount which they do not need to spend. It also ensures the protection of capital and also a guaranteed income. The income might not be a hefty sum, but if you don’t want risk and equity exposure, then FD is just the thing for you. You will surely want to invest in FD as Bank / NBFC Fixed Deposit interest rates are very lucrative.
Features of fixed deposit:
- Long term investment: FD is there to get you a steady rate of interest for a long period and keep your money safe and not subject to market risk.
- One-time deposit: You only have to deposit once and then just wait until maturity as your money will keep growing.
- Fixed Deposit receipt: You will receive an FD receipt that can be attained either online or offline.
- Interest Payout: FD interest is paid out quarterly or half-yearly as per the investor’s request.
- Tax Efficiency: You can also opt for tax-free FD where you can invest up to 1.5 lakhs to save on income tax.
Advantages and Disadvantages of Fixed Deposits:
- Low risk: An FD account is a safe place to save your money where the market risks cannot affect the money.
- Loan against FD: During emergencies, people look for investments which they can liquidate easily and FD is one such option.
- Steady income: FD allows a steady income as the interest pay off is done quarterly or half-yearly as per the Investors request.
- More for senior citizens: Fixed Deposit offers a higher rate of interest for senior citizens. They get the best FD rates.
- Tax-perks: As mentioned above, you can avail tax saving under 80c for investing over 5years.
- Option to reinvest: You can request the bak to reinvest your funds once the maturity period is over.
- Returns are not inflation-beating: Everyone knows that FD is the best choice for gaining maximum returns, but there are other options too, which allows you to get double revenue.
- Less Liquidity: The FD once broken loses most parts of its benefit before the maturity period.
- Fewer Tax benefits: Even though it comes under 80C investments, the returns you earn are taxable.
How to apply for FD online:
Getting an FD now is a very easy process you just need to have your net banking active from any bank account. You do not need to apply for a Know Your Customer(KYC) as the bank does not need to verify you again. Online you can check and get the best FD rates.
Some Bank / NBFC and their rate of interest:
|State Bank of India
|4.50% – 6.10%
|5% – 6.60%
|3.50% – 6.30%
|4.00% – 6.80%
|2.75% – 5.50%
|3.25% – 6.00%
|Bank of India
|4.25% – 6.20%
|4.75% – 6.70%
|PNB Housing Finance
|6.75% – 7%
|3.65% – 8.00%
Earlier investing in FD was a tedious job as you had to procure a lot of documents to get your application done. You would have needed an id proof and an address proof. Bank / NBFC Fixed Deposit Interest rates are good enough now and the options of tax saving and regular income make it a very attractive deal provided it can be liquified in case of emergencies.