#NewDelhi: The first thing that comes to mind when thinking of safe, secure investments is that the savings scheme is a fixed deposit. The main advantage of investing through this is that after a certain period of time, a certain amount of money will come in handy. And there will be no risk. So investing in a fixed deposit is much safer than investing in equities. Because this type of deposit is not associated with the market and a certain amount of money also comes in handy.
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What is Fixed Deposit?
The name Fixed Deposit (FD) implies that the term for such investments is fixed. At the same time, the amount of interest received from it is also fixed. The first step in investing is to deposit money. And the term of the investment is 7 days to 10 years, in some cases it can be 20 years. There is no need to open a separate account for a fixed deposit. This is because a fixed deposit may be associated with the investor’s savings account.
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There are two types of FDs –
There are usually two types of FDs The first cumulative FD and non-cumulative FD6 Here interest is available as a quarterly annual If you want, you can also take advantage of interest at regular intervals
What are the benefits of investing in FDs?
- Fixed deposits are considered to be the safest investment option
- There is no risk on the original money deposited here You will also get interest for a certain period of time
- FDs offer higher interest rates than savings schemes The highest interest paid to senior citizens is in FDs
- You only have to invest once in a fixed deposit If you want to invest more money after investing once, you have to open a new FD
- You have to invest in FD for a certain period of time However, if needed, you can withdraw money from FD before maturity However, in that case there will be a loss on interest and you will have to pay some penalty
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Tax deduction rules in FDs
0 to 30 percent tax is deducted on fixed deposit However, it is deducted as an income tax slab for the investor If you earn more than Rs 10,000 in a year, you have to pay 10 percent tax on FD For this you need to submit a copy of PAN card 20 percent TDS will be deducted if PAN card is not submitted In order to avoid tax deduction, you have to submit Form 15 to the bank It applies to those who do not fall into any income tax slab In order to avoid tax deduction, senior citizens have to pay 15H
Tags: Fixed Deposit, Interest rate on FD
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