Invest in Fixed Deposit (FD)
- 20 Comment
Introduction
This is the correct time if you want to invest in the Fixed Deposit (FD) schemes. In the past, banks offer very low Interest Rates on the deposits, so people tend to invest on the property like buying home, land, etc. So, it is created very common attitude among people that depositing in the banks doesn’t offer good return. The days are gone, now most of the banks offer decent interest rates on the deposit. I will write about few banks where you can get the high return for your investment.
Why you should invest in Fixed Deposit?
The main reason for investing in the Fixed Deposit is to get the high interested rates. While you are keeping your money with Savings Account, you will get 3.5% p.a. (It is standard for all the banks) as the interest rate for your money. It is very low compare to the Fixed Deposit (FD). Keeping money in the Savings Bank account is good when you have urgent needs, but if you know that there is no spending for the money, please move it to FD and get the highest rates. Nowadays most of the banks like ICICI, HDFC, etc. providing online facility to directly moving your balance to creating the Fixed Deposit (FD) account.
Which bank offers good return for Fixed Deposit?
To write this blog I have inquired on few banks to get the details. So, I don’t want to say only these banks will offer you the best interest rates. Please inquire most of the banks before planning to invest the money.
You can see the list FD rates here. It is ranging from 3.75% p.a. to maximum of 10.5 % p.a..
You can see the list FD rates here. It is ranging from 3.5% p.a. to maximum of 11.0 % p.a..
You can see the list FD rates here. It is ranging from 5.0% p.a. to maximum of 11.0 % p.a.. Compare to other banks ING Vysya offers good interest rates. Here the minimum is 5.0%.
You can see the list FD rates here. It is ranging from 3.0% p.a. to maximum of 10.75 % p.a..
Note that the FD Rates will be 0.5 % will be more for the Senior Citizens (above 60 years old). It is the standard for all the banks. So, if you want to invest, good idea to invest in the name of your parents if they are above 60. You will get 0.5% p.a. more on your money. All the above rates are for the below 15 lakhs. If you are investing above 15 lakhs, the Interest Rates would be different.
TAX on Fixed Deposit (FD)
The interest amount received through Fixed Deposit (FD) is taxable income. They will cut as Tax Deduction on Source (TDS) before giving you the interest money. But, If you have taken loan on the FD, the tax is not applicable. It is better to consult with the bank guys before taking any decision.
Loan on Fixed Deposit (FD)
You can take the loan by using your Fixed Deposit (FD). The Interest Rates will be 1.0% p.a. more than your FD Interest Rates (It may vary depending on the banks). So, you need not close the FD in case if you urgent need of money.
Read : Fixed Deposit Articles
I hope this article is much useful for the guys who want to deposit in banks. Please post your comments and subscribe to our RSS feeds.
If you have any query related to Fixed Deposit or if you would like to know about the latest interest rates on Fixed Deposit please post it in the comments section. I will answer all your questions. Thank you for reading this article.
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20 Comments on this post
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PANKAJ MIGLANI said:
PLEASE LET ME KNOW HOW MUCH TAX WILL BE DEDUCTED ON INTEREST ON FD OF 1 LAKH FOR 365 DAYS IF THE RATE OF INTEREST IS 10.5% PER ANNUM.
July 15th, 2009 at 9:44 am -
krishnas said:
HI Pankaj,
If you are calculating the Simple Interest, then the total interest for 1 year is Rs.10500. The TDS for the interest income is 10% for the total income. In your case you will have to pay the Rs.1050 as the tax. Please consult with the banker. You can avoid the tax if you are splitting the investment into different branches. You can read this article here:
http://www.thinkplaninvest.com/2009/04/how-to-avoid-tds-on-fixed-deposit/July 15th, 2009 at 6:26 pm -
PAWAN MISRHA said:
hi,
If i have an account in SBI in my native city and i m working in another city then can i get it made FD in any SBI bank or it will be only in that bank where your account is there..and i want to show it for 80c then what should i doSeptember 16th, 2009 at 11:31 pm -
krishnas said:
Hello Pawan,
You can open FD account in any branch. Normally FD is seperate account not linked to your savings account. If you want to show under section 80c please deposit under the Tax Savings Deposit. You can read about it here:
http://www.thinkplaninvest.com/2009/01/tax-savings-on-term-depsoit-under-section-80c/Thanks,
KrishnaSeptember 17th, 2009 at 8:24 am -
Raja Deepak said:
Investment for Income tax.
Hi Krishnas , I am a regular fan of you site ,i need your help for planning my investment for my tax savings for 1 Lac.Can you plesae mail me the investment opportunities and the splits (i.e Mutual , fixed or LIC policy of one time investment for my child)which is the good option and how to slit the funds and also where all to invest .
My back ground – Married, 1 child (2yrs), Working in a MNC organisation i dont like to take SIP i want to clear my investment for that year and not want to carry over for next like eg paying every year for ulip plans or SIP,so please help me with this.Mail me back if any more information required or i can give you my Phone # too if required.Thanks in advance.
November 4th, 2009 at 8:02 am -
krishnas said:
Hello Raja,
Thank you for the comments. Here I am writing the investment options for you. Since you have asked for the 1 lac,
1. Do you have LIC policy. If not please take one LIC policy. Rs.10000 premium policy is enough.
2. Open PPF account for your child. PPF is long term investment and has the lock-in period of 15 years. This savings will be useful when your child want to Join college. Under PPF you can invest Rs.70000(maximum limit) per year. It is up to you how much you want to save for your child.
3. Invest Rs.50000 under mutual fund scheme. I would suggest for the SIP. If you are investing for only one year then mutual funds is not the good option. You will get good return if planning for minimum three years. This month I will write one article explaining the most profitable SIP investments.
If you are providing your income details and expenses, I can give you more detailed investment options.
Thanks,
KrishnaNovember 4th, 2009 at 8:47 am -
Raja Deepak said:
Hi Krishna
Thanks for your suggestions,
I am working in a MNC company ,My ctc is 4.00 Lac,My daughter is 2.5 yrs old.I have one ICICI prulife unit link policy in my name, which i have completed 3yrs.These are the basic details .Regarding expences i have around 10,000-12,000 monthly home expences other than this i dont have any expence.rest of the amount i can do the saving.Please help me in building my financial portfolio in the right track.Thanks
Deepak.November 13th, 2009 at 11:26 am -
SM said:
How much will my investment be worth if I have put 3.00 Lacs in fixed deposit in June 2008 to mature in December 2009? Please let me know the TDS that will be charged on maturity.
Thanks,
SMNovember 25th, 2009 at 11:29 pm -
krishnas said:
Hello SM,
It depends on the which bank or company you are opening the fixed deposit account. Now the interest rates are very low. I don’t think it is good idea if you are expecting the good return.
Please let me know your plan.
Thanks,
KrishnaNovember 25th, 2009 at 11:41 pm -
SM said:
Thanks Krishna.
Is there any way to check on the historical rate of interest and then simulate for different bank rates for the maturity amount?
If so please let me know the details of the site.I want to enter the principal, tenure, know the rate of interest and it should let me know the maturity amount. Also what is the TDS deducted.
Thanks,
SouravNovember 25th, 2009 at 11:51 pm -
krishnas said:
Hello SM,
Here is the calculator:
http://www.rupeetimes.com/calculators/fixed_deposits/fixed_deposit_interest_income_calculator.phpPlease let me know. I can help you to chose the plan.
Thanks,
KrishnaNovember 25th, 2009 at 11:59 pm -
yash said:
Hi Krishna,
I am NRI. Further, I have interest income with TDS deducted in my NRO account. Further I have investment in LIC, existing PPF etc. Can I claim exemption under 80C the way residents do, when I file my income tax return to bring my tax slab to claim back the TDS. If I can exemtion under 80C for Rs. 1 lacs (LIC, exiting PPF contribution etc), I can save a lot of tax. Only income I have in india is NRO FD.
Please clarify.
Kind regards,
YashJanuary 5th, 2010 at 3:15 am -
sridhar said:
Hi i am interested in FD loan, Bank of india told that interest
will 2% extra.
is it ok to moveMarch 11th, 2010 at 12:37 am -
Sridhar said:
If so i want to know total calculation on 5,00,000 FD
Bank will give 85% of FD as loan i’e – 4,25,000.Awaiting right answer
March 11th, 2010 at 12:42 am
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