Tips to Take Care of While Investing in Fixed Deposits

Fixed Deposits are known to be one of the preferred investment options considering the guaranteed returns and no risks associated. Fixed deposit will allow you to manage your financial risks and will help in fulfilling your goals which you aspired for at different stages of your life.

Here are a few things that you should keep in mind before investing in Fixed Deposits:

Minimum deposit

  • There are companies which have different minimum and maximum deposit amounts.
  • It is recommended that you check the company’s website or visit the company’s representative before choosing to invest with them.

Tax deduction

  • If the personal interest income from a particular company’s fixed deposit is more than Rs. 5,000, then that particular company has to deduct the tax at source beyond that amount.
  • The Tax Deduction at Source (TDS) is applicable at the rate of 10%.
  • If the person fails to provide PAN card information at the time of applying or opening the Fixed deposit account then the TDS will be deducted at 20%.

Tenure

  • Mostly the banks give the tenure for Fixed Deposit ranging from 7 days to 10 years.
  • A person has to choose the tenure carefully as if any premature closure of a fixed deposit will affect the total interest of the fixed deposit and reduce the interest of FD.
  • Some banks will charge penalty for premature closure, make sure you check their terms and conditions.
  • NBFCs like Bajaj Finance are likely to offer flexible tenors when you want to invest in Fixed Deposits

Interest rate

  • The banks and NBFCs will offer Fixed Deposit (FD) Schemes on the basis of pay –interest on Cumulative and Non-cumulative, which is dependent on the choice of the applicant.
  • The non-cumulative schemes are those schemes which include a regular income on Monthly/ Quarterly/ Half-yearly/ annual basis.
  • The cumulative schemes are those schemes where the savings and returns will be paid to the person when the fixed deposit interest has matured.

Benefits for Senior Citizens

  • The senior citizen will get special rates on fixed deposit schemes than the regular fixed deposits schemes.
  • The interest rates for senior citizen fixed deposit will be higher with 0.25% than the standard fixed deposit rates offered.
  • NBFCs like Bajaj Finance offer higher interest rates to senior citizens as well as additional benefits that they can leverage post-retirement.

Fixed Deposit interest rates

The interest rates of fixed deposit will vary from bank to bank. The interest rate will also depended on what scheme you are choosing and for what tenure you are choosing for fixed deposit. Choose the best bank with higher interest rates as they will provide you with higher income.

Name of the bank Fixed deposit interest rate for Regular Fixed Deposit interest rate for senior citizen
Axis bank 3. 50% to 8. 00% 3. 50% to 8. 15%
Bajaj Finserv 8. 00% to 8. 75% 8. 35% to 9. 10%
Bank of Baroda 4. 50% to 6. 85% 5. 00% to 7. 35%
Bank of India 5. 25% to 6. 70% 5. 25% to 7. 20%
Citi bank 3. 00% to 6. 50% 3. 50% to 7. 00%
Corporation bank 4. 50% to 7. 00% 5. 00% to 7. 50%
HDFC bank 3. 50% to 7. 40% 4. 00% to 7. 90%
ICICI bank 4. 00% to 7. 50% 4. 50% to 8. 00%
Indian bank 4. 50% to 6. 75% 5. 00% to 7. 25%
Kotak bank 3. 50% to 7. 30% 4. 00% to 7. 80%
Punjab National Bank 5. 75% to 7. 00% 6. 25% to 7. 50%
State bank of India 5. 75% to 7. 00% 6. 25% to 7. 50%
Syndicate bank 4. 75% to 7. 05% 5. 25% to 7. 55%
Union bank of India 5. 00% to 6. 75% 5. 50% to 7. 25%

The above shown rates of interests are fixed deposit rates for both the regular fixed deposit accounts as well as for senior citizen fixed deposit accounts. Out of the list, it is apparent that Bajaj Finance offers the highest rate of interest for fixed deposit, with several other major benefits specific to Fixed Deposits.

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