Bank FD: One of the safest investment options is Fixed Deposits, whose tenors range from 7 days to 10 years. If you have also got FD done somewhere, then it is very important for you to know this.
New Delhi. Fixed Deposits are the most preferred investment option of people in all types of Savings Schemes. This method of saving is liked by people of all ages. The biggest reason for this is that it is safe and least risky as compared to other schemes. One can also invest in it for short to long term. Today we are going to give you many information including FD related rules, taxes, keeping in mind that you can easily take better advantage of this saving scheme…
There are two types of FD
Generally there are two types of FD. The first is cumulative FD and the second is non-cumulative FD. Interest is accrued in it on quarterly and yearly basis. However, you can also avail interest at regular intervals.
These are the advantages of investing in Fixed Deposit
>> Fixed Deposit is considered as one of the safest investment option.
>> There is no risk on the principal deposited in this. In addition, you can also get returns within a stipulated period.
>> The principal amount invested in it remains safe because there is no direct effect of market fluctuations on FD.
>> In this scheme, investors can take advantage of monthly interest.
>> Generally the interest rate available on FD is high. For senior citizens, it gives the highest returns.
>> You have to invest only once in any FD. If the investor wants to make more deposits after this, then he will have to open a separate FD account.
>> FD has a maturity period, you have to deposit money for that many years. But this advantage is also that if needed, you can withdraw money even before time. Although you lose interest if you break the FD before maturity, some penalty has to be paid on it. Which is different in different banks.
What is the tax deduction rule on FD
There is a tax deduction of 0 to 30 percent on fixed deposits. It is deducted on the basis of income tax slab of the investor. If you earn more than Rs 10,000 in a year, then you will have to pay 10 percent tax on your FD. However, for this you will have to submit a copy of your PAN card. If PAN card is not submitted, then 20 percent TDS is deducted on it. If the investor wants to avoid tax deduction, then for this they should submit Form 15A to their bank. This is applicable for those people who do not fall in any income tax slab. Senior citizens should submit Form 15H to avoid tax deduction.
