By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Investment SimplifiedInvestment Simplified
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • EPF
    • Popular Searches
    • EPFO Member Portal – Login, Registration
    • EPFO Establishment Search
    • Guide to Your EPFO Member Login
    • EPF Interest Rate
    • What Is UAN Activation?
  • PAN Card
    • Popular Searches
    • What is a PAN Card
    • NSDL PAN Card
    • UTI PAN
    • e-PAN Card
    • PAN Card Apply
  • Banking
    • Banks
      • Popular Searches
      • State Bank of India (SBI)
      • Bank of Baroda (BOB)
      • Canara Bank
      • Indian Bank
      • Bank of India (BOI)
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Enquiry by SMS, Missed Call, Netbanking
      • SBI Balance Enquiry
      • Union Bank of India Balance Enquiry Number
      • BOB Balance Enquiry
      • PNB Balance Check Number – Enquiry by SMS, Missed Call, Netbanking
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care – Missed Call and Toll Free Number
      • Bank of Maharashtra Customer Care
      • Punjab National Bank Customer Care Number – PNB Grievance Redressal
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS Form
      • Axis Bank RTGS Form
      • HDFC RTGS Form
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque – Meaning, Issuance and How to Write
      • Cancelled Cheque – How to Write a Cancelled Cheque?
      • Account Payee Cheque
      • What is a Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in June 2023
      • Bank Holidays in July 2023
      • Bank Holidays in August 2023
      • Bank Holidays in September 2023
      • Bank Holidays in October 2023
    • Mobile Banking
      • Popular Searches
      • SBI Mobile Banking
      • HDFC Mobile Banking
      • Bank of Baroda Mobile Banking
      • Indian Bank Mobile Banking
      • Canara Bank Mobile Banking
    • Passbook
      • Popular Searches
      • SBI Passbook
      • Union Bank Passbook
      • BOB Passbook
      • HDFC Passbook
      • Axis Bank Passbook
    • Demand Draft
      • Popular Searches
      • Demand Draft Validity
      • Demand Draft Form
      • Demand Draft Charges
      • Demand Draft Clearing Time
      • Demand Draft vs Pay Order
    • Bank Statement
      • SBI Bank Statement
      • HDFC Bank Statement
      • ICICI Bank Statement
      • Axis Bank Statement
      • BOB Bank Statement
    • Bank Charges
      • Axis Bank Charges
      • HDFC Bank Charges
      • ICICI Bank Charges
      • Union Bank Charges
      • Bank of Baroda Charges
  • Savings Account
    • Popular Searches
    • What is a savings account
    • SBI Savings Account
    • Bank of Baroda Saving Account
    • Bank of Maharashtra Saving Account
    • Central Bank of India Saving Account
  • Insurance
    • Life Insurance
      • What Should Be the Ideal Policy Period for Term Insurance?
      • Why Should Term Insurance Be Your First Investment?
      • Best Ways To Avoid Life Insurance Claim Rejection
      • 5-step process to shortlist the best term insurance for yourself
      • Why Should You Buy an Insurance Policy Online?
    • General Insurance
    • Car Insurance
    • Travel Insurance
  • Fixed Deposit
    • What is Fixed Deposit
      • Axis Bank FD
      • Bank of Maharashtra FD
      • Bank of Baroda Fixed Deposit
    • FD Calculator
      • SBI FD Calculator
      • HDFC Bank FD Calculator
      • Axis Bank FD Calculator
      • ICICI Bank FD Calculator
      • Canara Bank FD Calculator
    • Credit Card against Fixed Deposit
    • Fixed Deposit Income Tax Exemption
    • Loan against Fixed Deposits
    • Bandhan Bank FD Rates
    • Axis Bank FD Rates 2023
    • Bank of Baroda FD Rates
  • Resources
    • Pension & Retirement
    • Web Stories
    • About Us
    • Contact
Reading: Fixed Deposit
Share
Investment SimplifiedInvestment Simplified
Search
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • EPF
    • Popular Searches
    • EPFO Member Portal – Login, Registration
    • EPFO Establishment Search
    • Guide to Your EPFO Member Login
    • EPF Interest Rate
    • What Is UAN Activation?
  • PAN Card
    • Popular Searches
    • What is a PAN Card
    • NSDL PAN Card
    • UTI PAN
    • e-PAN Card
    • PAN Card Apply
  • Banking
    • Banks
      • Popular Searches
      • State Bank of India (SBI)
      • Bank of Baroda (BOB)
      • Canara Bank
      • Indian Bank
      • Bank of India (BOI)
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Enquiry by SMS, Missed Call, Netbanking
      • SBI Balance Enquiry
      • Union Bank of India Balance Enquiry Number
      • BOB Balance Enquiry
      • PNB Balance Check Number – Enquiry by SMS, Missed Call, Netbanking
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care – Missed Call and Toll Free Number
      • Bank of Maharashtra Customer Care
      • Punjab National Bank Customer Care Number – PNB Grievance Redressal
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS Form
      • Axis Bank RTGS Form
      • HDFC RTGS Form
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque – Meaning, Issuance and How to Write
      • Cancelled Cheque – How to Write a Cancelled Cheque?
      • Account Payee Cheque
      • What is a Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in June 2023
      • Bank Holidays in July 2023
      • Bank Holidays in August 2023
      • Bank Holidays in September 2023
      • Bank Holidays in October 2023
    • Mobile Banking
      • Popular Searches
      • SBI Mobile Banking
      • HDFC Mobile Banking
      • Bank of Baroda Mobile Banking
      • Indian Bank Mobile Banking
      • Canara Bank Mobile Banking
    • Passbook
      • Popular Searches
      • SBI Passbook
      • Union Bank Passbook
      • BOB Passbook
      • HDFC Passbook
      • Axis Bank Passbook
    • Demand Draft
      • Popular Searches
      • Demand Draft Validity
      • Demand Draft Form
      • Demand Draft Charges
      • Demand Draft Clearing Time
      • Demand Draft vs Pay Order
    • Bank Statement
      • SBI Bank Statement
      • HDFC Bank Statement
      • ICICI Bank Statement
      • Axis Bank Statement
      • BOB Bank Statement
    • Bank Charges
      • Axis Bank Charges
      • HDFC Bank Charges
      • ICICI Bank Charges
      • Union Bank Charges
      • Bank of Baroda Charges
  • Savings Account
    • Popular Searches
    • What is a savings account
    • SBI Savings Account
    • Bank of Baroda Saving Account
    • Bank of Maharashtra Saving Account
    • Central Bank of India Saving Account
  • Insurance
    • Life Insurance
      • What Should Be the Ideal Policy Period for Term Insurance?
      • Why Should Term Insurance Be Your First Investment?
      • Best Ways To Avoid Life Insurance Claim Rejection
      • 5-step process to shortlist the best term insurance for yourself
      • Why Should You Buy an Insurance Policy Online?
    • General Insurance
    • Car Insurance
    • Travel Insurance
  • Fixed Deposit
    • What is Fixed Deposit
      • Axis Bank FD
      • Bank of Maharashtra FD
      • Bank of Baroda Fixed Deposit
    • FD Calculator
      • SBI FD Calculator
      • HDFC Bank FD Calculator
      • Axis Bank FD Calculator
      • ICICI Bank FD Calculator
      • Canara Bank FD Calculator
    • Credit Card against Fixed Deposit
    • Fixed Deposit Income Tax Exemption
    • Loan against Fixed Deposits
    • Bandhan Bank FD Rates
    • Axis Bank FD Rates 2023
    • Bank of Baroda FD Rates
  • Resources
    • Pension & Retirement
    • Web Stories
    • About Us
    • Contact
Investment Simplified > Fixed Deposit > Fixed Deposit
Fixed Deposit

Fixed Deposit

Ashish Kumar
Last updated: 2023/08/26 at 12:55 PM
Ashish Kumar Published September 20, 2023 7 Min Read
Share
Why You Should Consider Including FD in Your Investment Portfolio?Who Should Invest in FDs?Comparative Analysis of FD Rates Provided by Various InstitutionsWhat are the Things to Check Before Investing in FDs? 

FDs (Fixed Deposits) continue to be the number one option for people who do not want to take risks while investing. Their biggest attraction is the guaranteed return, irrespective of the market condition.  

If you are among those who wish to have guaranteed returns and are willing to take zero risks, consider initiating a fixed deposit today. Read on to learn its benefits. 

Why You Should Consider Including FD in Your Investment Portfolio?

Although many easy-to-access investment tools have come up, financial experts still consider fixed deposits one of the primary investment strategies. The reasons are pretty straightforward and have been discussed below:

Involves little to no risk

Unlike stock market investments, fixed deposits aren’t subject to market volatility. These debt-linked plans assure limited but secured returns to investors after the lock-in period. Thus, budding investors are advised to park their money in bank FD accounts as it will never require real-time management, and the fixed FD interest rate will ensure guaranteed returns.   

Besides beginners, if you are willing to keep a large chunk of your capital safe and don’t intend to lose its value because of inflation, consider starting this investment option. 

Ensures several tax exemptions

Depending on your deposit type, tax exemptions can be claimed for up to ₹1.5 lakhs following the provisions of Section 80C. Moreover, if you are a senior citizen, no income tax liability remains for annual interest earned up to ₹50,000 against FD investments. Even if you are not yet 60 years old, no TDS gets sanctioned on the due interest earnings of an FD for up to ₹40,000 every year.

Offers quick renewals

Fixed deposit renewals are one of the most convenient ways to grow one’s wealth exponentially. Depending on your preferred renewal terms, the bank sets a lock-in period that enables disciplined investments for fulfilling any financial goal. Once the deposit matures, as an investor, you can easily renew the investment, and in some cases, you can earn a better interest rate as well.

Allows emergency withdrawals

People often believe that the bank allows premature withdrawal rights to fixed deposit account holders under no circumstances. However, the truth is quite the opposite and financial institutions permit their customers to withdraw the deposited sum partially or fully in exchange for a nominal penalty. Generally, these penalty charges do not cross 0.5% – 1% of the deposited capital.

Scan the benefits of FD and make an investment to realise your financial goals

Helps get a loan against investment

 This feature is always seen as an added benefit during acute financial emergencies. Using your deposit as collateral, you can secure the financing you need. The loan amount, however, remains 70% to 90% of the FD amount. 

One of the greatest advantages of availing a loan against FD is that it incurs lower interest when compared to unsecured loans. However, the typical repayment period is the remaining months until maturity. 

So, these were the 5 top reasons that make fixed deposit investments lucrative for people looking forward to kick-starting their wealth-making journey.

Who Should Invest in FDs?

A wide range of people can consider investing in FDs which makes them popular among Indians. Here you can see some groups who are highly advised to initiate fixed deposit investments:

Non-Salaried Individuals

Instead of idly keeping the excess funds in a savings account, irregular income earners may park that amount in an FD account until the time they won’t need it. This provides a sense of financial security and puts restrictions on unnecessary expenses.

Risk-Averse People

Switching to FDs investing is ideal if you do not wish to spend a lot of time studying the stock market strategies and implementing them. It ultimately helps you earn a predetermined sum without worrying about volatility factors.

Retirees

For retirees with no pension income or other sources of revenue, FDs serve as a regular income stream. Financial security gets established throughout the retirement years as banks disburse the money monthly, just like the pension credit procedure.

Comparative Analysis of FD Rates Provided by Various Institutions

FD ProviderInterest RatesTenure
SBI BankUp to 6.10%7 days – 10 years
HDFC BankUp to 6.25%7 days – 10 years
Axis BankUp to 6.50%7 days – 10 years
Max Life InsuranceUp to 7.50%7 days – 10 years
Shriram Finance LtdUp to 8.18%12 months – 5 years
Canara BankUp to 6.50%7 days – 10 years
Mahindra FinanceUp to 7.75%12 months – 5 years
Bajaj Finance LimitedUp to 7.65%12 months – 5 years
IDFC First BankUp to 6.00%7 days – 10 years
Sundaram FinanceUp to 7.75%12 months – 3 years

What are the Things to Check Before Investing in FDs? 

Any financial planner will advise you to check multiple key factors before choosing an FD partner. These elements include:

Rate of Inflation

Inflation gradually diminishes the purchasing power of your earned money. Hence, consider starting an FD with an interest higher than estimated inflation. Also, the interest on fixed deposits does not change, irrespective of the inflation rate.

Tax Deduction

Tax-saving FDs constitute a specific category that allows you to enjoy TDS exemption for income earned up to ₹1.5 lakhs in a financial year. 

Cumulative and Non-Cumulative Fixed Deposits

Cumulative FDs enable you to reinvest the interests credited in each quarter or at regular intervals. Whereas non-cumulative FDs do not exhibit this feature, and thus you cannot further leverage from compounding. Instead, you can use it to generate regular income. You can use an FD calculator to learn more about the returns. Having said that, as a prospective investor, you should know the ways you can better your investment by harnessing the power of compounding.

Why do Indians prefer fixed deposits?

Most Indian investors consider including FDs in their portfolios as these instruments have been regarded as safe for years. They are simple to manage, completely detached from market fluctuations and provide stable interest earnings.

How to smartly invest in fixed deposits?

FDs do not offer a standardised interest rate and tend to vary for different banks. So, the first thing you must do is compare the FD rates of various financial organisations. 
Next, adjust a favourable tenure by analysing whether the maturity amount will be able to beat inflation. Then, filter out the FD provider options by mentioning your desired frequency of interest payouts, and finally, select a mode of payment.

Why is FD better than debt funds?

Though not as riskier as equity funds, certain market factors can still influence the returns generated from debt funds. Often inefficiency of the fund managers in market prediction can also lead to losses for debt fund investors. All these issues can be assuredly avoided when you invest in an FD. Thus it is undoubtedly better.

Share This Article
Facebook Twitter Whatsapp Whatsapp Email Copy Link Print
By Ashish Kumar
Ashish Kumar is a SEO content writing enthusiast and an avid blogger who closely follows the latest financial trends. He writes about various topics related to Insurance, Aadhaar, PAN, Banking and other financial products.
Previous Article Objectives of Investment Objectives of Investment
Next Article IOB Passbook IOB Passbook
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

You Might also Like

Service Tax E-Payment

Service Tax E-Payment

Before July 1, 2017, service tax was an independent tax charge paid…

Read More
Bank of Maharashtra Mini Statement

Bank of Maharashtra Mini Statement: How to Check by Missed Call & SMS?

If you have a bank account in the Bank of Maharashtra and…

Read More
EPFO member

Guide to Your EPFO Member Login

Are you an Indian citizen who has started working in the private…

Read More
How To Get GST Number

How To Get GST Number: A Comprehensive Insight

India adopted the Goods and Sevices tax system in 2017, to simplify…

Read More

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhaar
  • Mutual Funds
  • Banking
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy
Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhar
  • Mutual Funds
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy

Social Media

Copyright © 2023 Investment Simplified. All rights reserved.

Welcome Back!

Sign in to your account

Lost your password?