A fixed deposit (FD) is a good option for savings. If you want to have an FD, you have to take care of many essential things. You can take great advantage by taking care of some small things. So, before opening the FD, consider the following things.
More than one FD: Keep more FD with small amounts, it is much better than having a large amount of FD. If you need to, you can break one FD and meet your requirements, so the rest of your FD will also continue. You will also get interest rates of different FD.
Tax is deducted on interest: If the annual interest in savings is more than 10,000, it will come under the tax net. If the interest amount from FD is more than Rs. 10, 000, banks deduct 10% TDs. If you have FD in more than one bank, the interest will be calculated by merging the interest of all FD. You can claim this tax. If you want the bank not to deduct TDS, you can use 15G/15G/10G/15G/10G/15G/100,000/- if you want the bank to deduct TDS. 15H form has to be filled.
FD Duration and Interest Rate: Most people get FD for a period of 6 months, one year, 2 years, or 5 years. Many banks have different interest rates on the opening of FD for a little more or less days from this period. Therefore, before getting FD, take information about the FD period in the bank and the rates of interest received from them. You may get more interest when you get more or less FD than a certain period. In addition, FD can take an interest in monthly, quarterly, or half-yearly.
Loan against Fixed Deposit: You can also get a loan on your FD. This is called an overdraft facility. Under this, you have to pay an unmount with the interest rate in a fixed period. You can repay this amount in lump sum or installments. Also, if you make a payment before the stipulated time, you will not have to pay the prepayment charge. You only have to pay the interest of the day you have.
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