Your money remains completely safe in FD and returns are guaranteed. To a large extent this is true. But if the situation of bank collapse comes then only your amount up to Rs 5 lakh remains safe. People are not aware about this.
FD Benefits: In today’s time, there are many good schemes available for investment, but fixed deposits are still considered a reliable means of investment. Financial experts advise investors to include FD in their portfolio. It is believed that your money remains completely safe in FD and returns are guaranteed in it. To a large extent this is true. But have you ever wondered what happens to the amount deposited in your FD or account if your bank goes bankrupt? There are many things about which the bank does not tell you. Know here about this and all the other benefits available on FD-
Amount up to Rs 5 lakh remains safe
If the bank in which you have made your FD goes bankrupt, you get an insurance cover of up to Rs 5 lakh. Most people do not have this information. This insurance cover is given on the amount deposited in the bank under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. Earlier the deposit insurance on bank deposits was Rs 1 lakh but now it has been increased to Rs 5 lakh.
But the thing to be noted here is that if your deposit amount is more than Rs 5 lakh and the bank goes bankrupt, then only Rs 5 lakh will be given to you by the bank. The remaining amount will be lost. For example, if you have made an FD of Rs 10 lakh in a bank and that bank goes bankrupt, then you will get back only Rs 5 lakh, you will have to suffer a loss of Rs 5 lakh.
Also know about these benefits of FD
- Whether you get an FD for one year, 5 years or 10 years, you know how much money you will get on it at the time of maturity. This is the reason why FD is considered an investment with guaranteed returns.
- You can keep the tenure of FD as per your need. In many banks you are given the option of FD ranging from 7 days to 10 years. Interest is also available on it according to the tenure. Apart from this, you get the benefit of compounding interest on FD, that is, you not only get interest on the amount invested, you also get interest on the interest.
- If you suddenly need money, you can take a loan against it without breaking the FD. Banks give 90 to 95 percent of the total FD amount as loan. Generally, the interest on loan against FD is one percent more than that on FD.
- If you make FD for 5 years or more, then you get a chance to claim tax exemption under 80C. If you make an FD for less than 5 years, you will have to pay tax.
- In most of the banks, senior citizens are given 50 basis points i.e. 0.50% more interest than the common people. Apart from this, some banks give additional interest of 0.25% to ‘Super Senior Citizens’ who are 80 years of age or above. In such a situation, this is a beneficial deal for senior citizens.
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