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Best Fixed Deposits in India (2019)

IndianMoney.com Research Team | Posted On Wednesday, May 01,2019, 04:26 PM

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Best Fixed Deposits in India (2019)

 

 

What is Fixed Deposit?

A Fixed deposit is a very popular investment in India. Banks offer a higher interest rate to account holders in FD vis-a-vis savings bank accounts. The fixed deposits in India offer a variable maturity period ranging from 7 days to 10 years, which you (an investor) can choose according to needs. 

Who Can Invest in Fixed Deposit?

Any individual who is a resident of India (along with HUF, NRIs, a firm or a charitable trust), can open a fixed deposit with any bank or financial institution across India. Fixed deposit is an ideal investment option for people who have surplus cash lying idle in their savings bank accounts.

A Fixed deposit ensures capital protection as well as uniform flow of income. However, the returns may not be inflation beating. Fixed deposit is mainly a traditional form of investment, meant for investors who are risk-averse and do not want equity exposure. Debt funds are more tax-efficient than FDs, but are riskier compared to them.

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Best Fixed Deposits in India (2019)

Minimum and Maximum Investment Amount:

The minimum amount required to open an FD at the bank ranges from Rs 1,000 to Rs 10,000. There is no specified upper limit for the investment in fixed deposits.

SEE ALSO: Know Fixed Deposits

Interest Payments:

The interest paid by the bank and the maturity amount depend on FD interest rate. The rate offered on FD varies across banks. Majority of the banks are currently offering an interest rate ranging from 6.6% to 7.4% a year.

Almost all banks and financial institutions offer a slightly higher interest rate on FD to senior citizens. Many senior citizens are dependent on the interest earned from FDs, to fulfill their day to day needs, as they may not have other sources of income.

Some Bank FD Rates:

Name of Bank

Interest Rate

Laxmi Vilas Bank

7.85%

DCB Bank

7.5%

IDFC Bank

7.75%

RBL Bank

7.60%

SBI Bank

6%

Some Bank FD Rates for Senior Citizens:

Name of Bank

Interest Rate

Laxmi Vilas Bank

8.45%

DCB Bank

8.25%

IDFC Bank

8.25%

Bandhan Bank

8.25%

SBI

6.50%

Tenure of FD:

Fixed deposit in India offers variable tenure ranging from 7 days to 10 years. The interest gained on the principal amount depends mainly on the time period for which the money is invested. If you have no immediate expenditure or your finances are stable, then you can invest money for a longer tenure to earn a higher interest, which accumulates and is paid at maturity. A longer investment period helps your money grow with the power of compounding.

Type of Holding:

Tax saving fixed deposits can be held individually or jointly. However, if the mode of holding is joint, the tax benefit on the fixed deposit can be availed only by the primary holder as mentioned on the FD certificate.

Taxation:

Interest from FD is fully taxed.  Interest income is added to taxable salary and taxed as per income tax slabs.                 

  • Banks deduct TDS on fixed deposit at a rate of 10%.
  • For depositors who have not submitted PAN, the tax deducted at source is 20%.
  • In case the bank has deducted TDS at the rate of 10%, but you fall in higher tax brackets, then you have to pay the additional tax.
  • Investment up to Rs 1.5 Lakhs in a financial year, qualifies for Income Tax Deduction under Section 80C of the Income Tax Act for 5 year tax saver FD. 

Nomination Facility:

Nomination facility is available on fixed deposits at the time of opening the account. The details of the nominee can be added or modified at a later time. Individual, single or joint account holders can appoint a nominee. Hindu undivided families trust or society cannot appoint a nominee.

Fixed deposits in India allow only a single person to be appointed as a nominee. Appointing a nominee enables smooth transfer of money in case of demise of the account holder. In case one of the joint holders die, the account will be transferred to the surviving account holder. If both the joint account holders die, then the benefits/ money are transferred to the nominee’s account.

SEE ALSO: Types of fixed deposits

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