In this article I will be writing about the important points to consider while opening the fixed deposit account. I have already published many articles explaining the fixed deposit account and the tax savings involved with the fixed deposit schemes. This post is intend to list some of the key points which you must be aware before opening the fixed deposit account. I hope you will like the post and will be more informative. Please post your feedback and add if you have any points in your mind. If you like the post, subscribe to our future articles here.
Top 5 Rules for Fixed Deposit Investment
1. Split Your Fixed Deposit
You have to split the fixed deposit to avoid the TDS(Tax deduction at Source). If the total interest is more than Rs.10000 in a branch for the specific year, then TDS must be paid. To avoid that please split the fixed deposit and invest in the different banks.
2. Plan the Tenure
It is important to plan the number of years you want to keep the deposit. Banks will charge as penalty if you are foreclosing the deposit account. Please ask the banker for penalty applicable for the foreclosing.
3. Appoint a Nominee
Always appoint a nominee for your fixed deposit to avoid the hassle free release of amount after you. If you are not appointing any nominee, they will have to bring any of the heirs proof certificate to receive the money.
4. Check the compound interest policies
This is one of the important consideration while opening a fixed deposit account. When you hear the rate of interest is 8.0% p.a., first thing you have to ask whether it is compounded quarterly, half-yearly or yearly. If the interest is compounded quarterly, then the return rate of interest will be potentially more than the actual one.
5. Learn about taxable FD investment
If you are not aware that the FD savings can be used for tax benefits, please learn about the tax savings on fixed deposit. It has limitation of Rs.100000 under section 80c. Might be useful if you are looking for the same one.
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