Safety....Safety...Safety... your money needs to be safe. The first thing you look for in an investment. "Safe". One of the safest investments around "Fixed Deposit".
You deposit your money with a bank for a fixed time period. The bank pays you interest on the money you deposit with them. You agree not to withdraw money from the fixed deposit for the time period, you make the deposit. In case of an emergency (you need money in a hurry), you can break your fixed deposit (exit prematurely from the fixed deposit), by paying a penalty. The penalty is as follows: Interest rate which is applicable for the time period of the fixed deposit - 1%.
In a fixed deposit, interest is paid to you on maturity (end of the term period of the fixed deposit).The interest on the fixed deposit and the time period is fixed and this means you know the amount you will get on maturity of the fixed deposit, at the time of making the fixed deposit itself.
The money you invest is safe, and the interest you earn is guaranteed. You get an assured return on your investment.
Investing in a fixed deposit encourages you to save your money for difficult times. It inculcates the saving habit in you.
You can pledge your fixed deposit, as collateral for a loan. You also avail the loan at a lower interest rate.
You get a deduction on your taxable salary, if you invest in a 5 year tax saver fixed deposit. A special product, just to save tax.
If you are a resident of India (Minor or even a HUF), you can invest in a fixed deposit in India.
You deposit your money with a bank for a fixed time period called tenure of the fixed deposit. You get a higher interest on the money which you deposit in your fixed deposit, than in a savings bank account. On maturity of your fixed deposit, you are paid back your principal with interest.
You are not supposed to touch the money in the fixed deposit for the time you make the deposit. If you are in urgent need of money, you can break your fixed deposit (Withdraw money from your fixed deposit).
You have a penalty of 0.5-1% lower interest on your fixed deposit than promised if you do so.
In a flexi fixed deposit, your fixed deposit is linked to a savings bank account. Your money moves between the fixed deposit and your savings bank account.
The flexi fixed deposit is also called the sweep in - sweep out fixed deposit.
The 5 year tax saver fixed deposit is unique from other fixed deposits. You enjoy a deduction of INR 1.5 Lakhs a year under Section 80 C of the income tax act, if you deposit your money in a 5 year tax saver fixed deposit.
Not all fixed deposits enjoy the Section 80 C benefits. You have to invest your money in a tax saver 5 year fixed deposit to avail this tax saving benefit.
You need to deposit a minimum amount of INR 10,000.
You don't need to have a savings bank account. If you have one, it does have some benefits.
You require proof of identity and address: passport/ driving license/ voter's identity card/ PAN card/ ration card/ recent utility bills/ credit card bill. This is necessary for the KYC (Know Your Customer), procedure. You might require a letter of introduction to open a fixed deposit.
"Fixed Deposits" are considered to be the safest form of investment or savings that provides returns consistently at a fixed rate. The term "fixed" in Fixed Deposits denotes the period of maturity or tenure. Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is deposited in the bank for a specified time period with a fixed rate of interest.
Rate of interest differs from bank to bank. Normally, the rate is highest for deposits for 3-5 years. Every Banks offer fixed deposits schemes with a wide range of tenures for periods from 7 days to 10 years. Therefore, the depositors are supposed to continue such Fixed Deposits for the duration of time for which the depositor decides to keep the money with the bank. However, in case of need, the depositor can ask for closing the fixed deposit in advance by paying a penalty.
Banks have even introduced variable interest fixed deposits. The rate of interest in such deposits will keep on varying with the prevalent market rates i.e. it will go up if market interest rate goes and it will come down if the market rates fall.
Banks pay interest on term deposits based on the period of deposits and normally pay higher interest for longer term deposits.
Banks have full discretion to fix their interest rates on deposits and these rates are varied from time to time depending on market conditions.
Changes made in interest rates from time to time do not alter the interest paid on the existing deposits.
When banks quote a certain percentage of interest per annum for a given period, it is understood that interest payments are made on a quarterly basis.
The depositor can collect interest on every quarter and receive principal and interest on maturity.
RBI has now permitted banks to quote a higher rate of interest for individual deposits more than Rs.15 lakhs.
Banks are allowed to levy a penalty for premature encashment of deposits at their discretion.
Bank allows loans against the fixed deposits on demand. Margin retained over the deposit outstanding and interest rate charged thereon is decided by the bank and may vary from bank to bank.
To be absolutely sure of WHAT TO LOOK OUT, talk to IndianMoney.com on the phone for FREE financial consultation.
Expert Financial Advisors from IndianMoney.com would provide you unbiased, correct and up to date information so that you can make an informed financial decision.
Yes, you will get FD receipt. But, you will not be issued a receipt for FD opened through Internet Banking.
Yes, FD can be closed before the original term of the FD. In the event of the Fixed Deposit being closed before completing the original term of the deposit, interest will be paid at the rate applicable on the date of deposit, for the period for which the deposit has remained with the bank. In case of premature withdrawal the deposit may be subject to penal rate of interest as prescribed by the Bank on the date of deposit.
Yes, Loan facility is available up -to 90% of principal and accrued interest.
Yes, you can opt for auto renewal at the time of opening the FD or anytime before the FD matures. Auto renewal allows your FD to get renewed automatically for the same period as the original deposit. However under auto renewal option the fixed deposit receipt is with the custody of the Bank and Memorandum of Deposit (MOD) is issued in lieu of fixed deposit receipt.
After maturity of your FD, you can walk into the bank branches across the country and claim your deposit by furnishing your Fixed Deposit receipt/Memorandum of Deposit.
For the Traditional scheme, the interest on the Fixed Deposit (FD) account is credited to the Savings account specified by you on a monthly basis or on a quarterly basis. For the reinvestment scheme, the interest is compounded to the principal amount on a quarterly basis.
Tax is deducted at source, from the interest on Fixed Deposits, as applicable, as per the Income Tax Act, 1961.
TDS on fixed deposits is deducted at the following rates for the following category of account holders: Type of Account Holders - TDS (%)
Resident Individuals, Sole Proprietorship, Trusts, Association of Persons, Hindu Undivided Family (HUF) - 10.2%
Domestic Companies- 20.4%
NRO Deposits - 30.6% Confused? What tax rates are applicable, Call us on 080 67974000 and learn from us!
The facility of Nomination is available for relationships in the names of individuals. Unless otherwise specifically given in writing by depositors, nomination in deposit accounts will be at Customer ID level.
Each depositor in a bank is insured Upto a maximum of Rs.1, 00,000 (Rupees One Lakh) for both principal and interest amount held by him.
There is a potential to earn compound interest by reinvesting the principal amount along with the interest earned during the period.
Flexibility in altering period of deposit, maturity and payment instructions, principal amount.
Higher rate of interest on fixed deposits for senior citizens.
The Financial Resolution and Deposit Insurance popularly called FRDI, has been a topic of hot debate. Rumors had spread that under the FRDI Bill, your money would be used to bail-out banks, ....
A viral message has been going around on Whatsapp, “This tsunami will wipe out your money lying in the banks." This message, apparently written by a Mumbai based chartered account ....
Prime Minister Narendra Modi had approved a proposal to introduce a Financial Resolution and Deposit Insurance Bill, popularly called FRDI Bill in June this year. The Joint Committee o ....
After Prime Minister Narendra Modi demonetized Rs 500 and Rs 1000 notes, cashless transactions really took off in India. The Modi Government pushes on to make India a cashless economy like t ....
If you are a customer of SBI who has not linked your bank account to Aadhaar, you should do it soon, or your bank account could be suspended. The last date to link your SBI bank ac ....
If you have been reading the newspapers regularly, you would not have missed this interesting and shocking news. A daring bank robbery took place at the Bank of Baroda branch near Navi Mumba ....
You love keeping gold ornaments in your cupboard? This is a piece of advice for you. Just take all those gold ornaments and put them in a bank locker. What if your servant runs away with the family je ....
“Money is usually attracted, not pursued.”   ....
"The avoidance of taxes is the only intellectual pursuit that carries any reward." - John Maynard Keynes Yes, avoiding taxes brings meaning to your life. John Maynard Keynes, sure knew what he was ta ....
04 January 2018, Thursday
The Financial Resolution and Deposit Insurance popularly called FRDI, has been a topic of hot debate. Rumors had spread that under the FRDI Bill, your money would be used to bail-out banks, reeling under the weight of Non-Performing Assets (NPAs). What got you and other citizens worried...
13 December 2017, Wednesday
A viral message has been going around on Whatsapp, “This tsunami will wipe out your money lying in the banks." This message, apparently written by a Mumbai based chartered accountant, has created panic in you and other depositors in banks leading to the question, Are your deposi...
12 December 2017, Tuesday
Prime Minister Narendra Modi had approved a proposal to introduce a Financial Resolution and Deposit Insurance Bill, popularly called FRDI Bill in June this year. The Joint Committee of Parliament will submit its report during the Winter Session of Parliament, which starts on Decembe...
18 July 2012, Wednesday
Formalities for a health insurance claim You can make a claim under a Health insurance policy in two ways : On a Cashless basis and A Reimbursement Claim On a Cashless basis : For a claim on cashless basis, your treatment must be only at a network hospital of the Third Party Administrator (TP...
14 March 2014, Friday
As the name suggests ELSS invests the whole corpus in equities. Proportions as high as 80-90% of equities are found in an Equity Linked Savings Schemes. It is a special kind of mutual fund that qualifies for tax benefits. Basically Equity Linked Savings Scheme is a mutual fund with a lock in peri...
07 January 2014, Tuesday
One of the most common reason for family feuds in India as in the rest of the World is faulty estate planning. Estate planning is a neglected topic in India mainly because of the emotions attached to it. A common reason people neglect to make a will or indulge in estate planning in their younger y...