How can you Earn more from Fixed Deposits?
by Debra Valenza | September 15, 2017 10:35 am
There are times when you feel the need to invest your savings in planning for a better life. While you plan to invest, the various options in the market can confuse you. While you invest, it is important that you have the necessary knowledge for investing in a proper source. The best-recommended source can be Fixed Deposits, as they guarantee you the security of investment and stable returns.
When you invest in Fixed Deposits, it is important to know how to gain maximum profit from your investments. You can gain maximum benefits if you look for the lender which provides you with the highest interest for Fixed Deposits. This is a common reason why many investors have more than one FD accounts. You can choose to reinvest your money with the interest amount gained so that you can gain more interest and better returns in the future.
These are the basic things you can do to gain more from your deposits, while there are other factors that you can consider to gain more benefits from Fixed Deposits.
- Choice: When you apply for a Fixed Deposit, the financial institutions offer you two types of deposit options Fixed and Recurring. In Fixed Deposits, you deposit the money in one single payment to the financial institutions; in recurring deposit, you can deposit the money in instalments. The terms for returns and deposits are different for both of them.
- Fixed Returns: This is the best thing about FD. You can keep your amount deposited with the NBFCs or financial institutions, and you can gain returns until the maturity period. If you keep your money deposited for a longer period of time, you can gain a higher interest amount. The returns on interest depend on the interest rate type you choose. You can opt for a fixed rate of interest or a floating rate of interest depending on the market status.
- Taxation: The income generated from FDs are considered as taxable income. If your FD income exceeds INR 10, 0000 per annum, you will be charged with Tax Deduction at Source (TDS). The Reserve Bank of India (RBI) has directed the financial institutions to deduct the tax before depositing it into the account of the account holder. You can save yourself from TDS by submitting the 15G and 15H form to the financial institution.
- Withdrawal: While opening an FD account, you need to decide the maturity dates for the FD. If you withdraw your deposit amount before the maturity date you will have to pay the charges and penalties levied by the financial institutions. So, if you are planning to withdraw your money from your FD account before maturity, you need to check for the penalty charges that will be levied on the withdrawal.
- Income: There are many instances when you are not able to manage your monthly expenses with your salary. While maintaining an FD account, you resort to compromise rather than withdrawing your FD amount. In such a situation, you can turn your FD compounding duration to monthly, which means the interest rate which you were getting annually, will now be added monthly to your account.
As FDs prove to be a risk-free option for investment, it is important that you know how to make the best use of the Fixed Deposit interest that you gain from your account. You also need to calculate your budget before you apply for FDs.
- highest interest for Fixed Deposits: https://www.bajajfinserv.in/investment/fixed-deposit/fixed-deposit-fees-and-interest-rates.aspx
- best thing about FD: https://www.bajajfinserv.in/investment/fixed-deposit/fixed-deposit.aspx
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