Most people choose FD to invest their savings money because it gives guaranteed returns and there is no risk of money sinking. Your money is safe in FD, but apart from this, FD has many advantages.
New Delhi. Fixed Deposit (FD) is considered very reliable for investment. Most of the people prefer to invest their savings money in this because it gives guaranteed returns and there is no risk of money sinking. The interest rates on FD depend on the tenure of the investment. It varies in all banks. In this, you get a good return along with the capital invested at the time of maturity.
Your savings money is safe in FD, but do you know that apart from this, FD has many benefits. You can use bank FD to avail loan andIncome TaxCan also save. In this article, we will tell you about some similar facilities available with FD, which you can take advantage of.
You can take loan against your bank FD
Any bank keeps any of your valuables for recovery in lieu of giving loan. But if you have got FD done in any bank, then you can use it to take a loan. At the same time, in some banks, you also get the facility of overdraft on FD. In this, the bank provides you loan on the guarantee of FD. The loan amount is decided according to your FD.
Will be useful in saving income tax
Bank FD also helps you save income tax. You can claim tax exemption under section 80C of the Income Tax Act, 1961. For this, the tenure of your FD must be 5 years or more. A condition is also included in this that the interest received on FD in any one of the 5 years should not be more than 40 thousand rupees. If this interest is more than this, then you have to pay tax.
Insurance cover up to Rs 5 lakh
If you get an FD done in a bank and that bank becomes insolvent due to some reason, then to deal with such a situation, an insurance cover has been arranged by the Deposit Insurance and Credit Guarantee Corporation on the FD. Under this, you are given an insurance cover of up to 5 lakhs. If your FD amount is Rs 5 lakh or less, then you will get the entire amount through insurance cover. On the other hand, even in case of a higher amount, you get a cover of Rs 5 lakh only. Due to this, the risk of sinking money is greatly reduced.
Will get life insurance as much as FD
Banks offer many types of offers to attract more and more people to invest in their FD scheme. There are some banks which also provide the facility of life insurance on FD. All banks have some conditions in this.
Guaranteed return is available at the time of maturity
The rates of interest available on FD in banks are already fixed. These rates are affected by the repo rate of RBI and they change due to its decrease or increase. The rate of interest earned on the FD is decided according to the tenure of the FD. The most important thing about FD is that on the day you get FD done, you can calculate how much return you will get at the time of maturity.
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