Are you looking Investment in Bank Fixed Deposits (FD)
Fixed Deposit or FD with banks can generate a return of up to 10% p.a, without involving any risk. One can invest in FD even for 15 days. Senior citizens are entitled to a slightly higher rate of interest on their FD a/cs. Al-though FDs are to be placed for a stipulated period, in an emergency, the depositor can withdraw the deposit before the stipulated period by settling for a proportionately reduced rate of interest. With interest rates hardening, it makes eminent sense to invest in bank FDs; they are safe and liquid too!
What is a fixed deposit?
Fixed Deposit is a savings bank account which gives a fixed rate of interest against stipulated maturity period. Fixed deposits are a high interest deposit scheme from banks in India. Fixed Deposits are measured as a safe investment policy in India. Bank fixed deposit rates are much higher than interest rate of regular savings accounts. Also fixed deposit investment is risk free.
Any person can invest in fixed deposits for future savings purpose as the fixed deposit rates in India are very high. The minimum invest time on FD is 10 days. Senior citizens get higher interest rate on fixed deposit. One can renew his fixed deposit with banks after maturity period. NRIs and people of Indian Origin can also open fixed deposit accounts in banks and avail risk free fixed deposit interest.
The longest allowable tenure of fixed deposit is 10 years. The duration of a fixed deposit is very flexible; one can invest on fixed deposit from 10 days, 15 days, 45 days, 1.5 years and up to the highest tenure of 10 years.
Fixed Deposits from banks are the most safe investment options as the fixed deposits are insured along with assured interest on fixed deposit return.
Fixed Deposit amount usually cannot be withdrawn before maturity period however in case of emergency there is provision of premature withdrawal on fixed deposit. But in that case one has to settle with reduced bank deposit rates of interest as penalty.
Fixed deposit investment is better than Post Office offerings, as FDs are covered under insurance & Credit Guarantee Scheme of India.
The minimum fixed deposit amount in India is Rs. 1,000/-. Interest on fixed deposit will be credited to the investor’s account once in 6 months. Fixed deposit ensures tax free income up to Rs. 6000 for both partners (spouses) each.
One can claim loans against his FD with banks and can get loans up to 85% on the capital deposit value. The interest rates of banks on the loan are 1 to 2% higher than interest rate on fixed deposit. The best part is that fixed deposit can provide Income tax offers and Wealth tax benefits.
Interest rate on fixed deposit with banks can generate a return of up to 10% per year.
Investment in fixed deposits are not only safe, it is liquid too. Interest rates of banks are quite lucrative. Most banks in India offer good fixed deposit interest. Interest rates of banks vary from 4% to 11% per annum. SBI interest rate is high interest rate on fixed deposits. It offers 9.5% per year. As the interest rates of banks on fixed deposits are higher than any regular saving accounts, investors like to invest on this.
If the annual interest on fixed deposit exceeds Rs. 10,000 per annum, then banks are liable to deduct the tax from the customer’s fixed deposit account. This income tax rule is called deducted at Source and currently in India the fixed rate is 10 % of the interest. It is valid on both interests payable or reinvested per fixed deposit consumer or per branch.