- Before investing in a fixed deposit, it is important to think carefully before deciding its tenure.
- It would be better to invest in small finance bank for higher interest
Fixed deposit i.e. FD is a popular means of investment in our country. People consider it safe and in this they get fixed returns. But investing randomly in FD is also not good. You may incur losses if you ignore certain important things while getting FD. Therefore it is important for you to keep some things in mind before investing money in FD.
For more interest FD can be done in private sector or small finance bank. Most of the big banks (public sector banks) in the country are offering interest rates of 5 to 6% on FD. On the other hand, if you talk about private sector or small finance bank, by FD here you can get 7 to 7.5% interest annually. Here, your money will be as safe as public sector bank. Here also, insurance facility is available for deposits up to Rs 5 lakh. That is, in case of default of the bank, every customer will get a maximum insurance of Rs 5 lakh through DICGC.
For how many years to get FD before investing in fixed deposits, it is important to think carefully before deciding its tenure (period). This is because if the investor withdraws the amount before maturity, they will have to pay the fine. Before breaking the FD, he will have to pay a penalty of 1% on breaking. This can reduce the total interest earned on deposits. That is why you can get into trouble if you choose tenure without understanding it. Long-term FDs should be avoided for greed of high interest.
Do not invest entire money in a single FD. If you are planning to invest 10 lakh rupees in FD in one bank, then instead of investing 9 FDs of 1 lakh rupees and 2 FDs of 50,000 rupees in more than one bank. Do it If you need money in between, then according to your need, you can arrange the money by breaking the FD in between. The rest of your FD will be safe.
Tax Interest income on your fixed deposits is taxed according to the income tax slab. If the interest earned on FD is above 10 thousand rupees in a financial year, then TDS deduction is made on that interest. This will be 10% of the total interest earned. This limit is 50 thousand for senior citizens. However, if your income is less than the taxable range, you can submit Form 15G and Form 15H to the bank to not allow TDS deduction on FD.
Withdrawal of interest The bank had the option to withdraw interest on the first quarter and yearly basis, now some can withdraw monthly in the bank. You can choose it according to your need.
See also the interest rate of the loan on FD. You can also take a loan on your FD. Under this, you can take a loan up to 90 percent of the value of FD. Suppose your FD is worth 1.5 lakh rupees, then you can get a loan of 1 lakh 35 thousand rupees. If you take a loan on FD, then you will have to pay 1-2% more than the interest on fixed deposits. For example, if you are getting 4 percent interest on your FD, then you can get a loan at 5 to 6 percent interest rate. Which bank offers loans at what interest rate
|Bank||Loan Interest Rate (%)||Minimum loan (Rupees)||Maximum loan|
|SBI||FD rate + 1%||Online: 25000At Branch: No Limit||Up to 90% of FD|
|Punjab National Bank||FD rate + 1%||Online: 25000At Branch: No Limit||Up to 95% of FD|
|Axis Bank||FD rate + 2%||25000||Up to 85% of F.D.|
|HDFC bank||FD rate + 2%||25000||Up to 90% of FD|
|Oriental Bank||FD rate + 1%||No limits||Up to 95% of FD|
|Federal Bank||FD rate + 2%||No limits||Up to 90% of FD|
|Indian Bank||FD rate + 2%||No limits||Up to 90% of FD|
|Bandhan Bank||FD rate + 1.5-2%||No limits||Up to 90% of FD|
Senior citizens get more interest Most banks offer up to .50% more interest on FD to senior citizens. In such a situation, if there is a senior citizen in your house, then you can earn more by getting FD in their name.