20
Oct
Should You Consider Investing in Fixed Deposits?
Do you want a stable or predictable financial status? If these factors entice you a lot, you can consider fixed deposit. This finance investment mode is particularly meant for those individuals who have surplus capital and are in hunt for investment option to receive more than simply monetary returns. Whenever you have surplus money, people will suggest you fixed deposit. It is the financial instrument or product offered by the financial institutions like banks to individuals at a greater rate of interest than what the regular savings can offer. The deposit is done for a fixed period of time and it may or may not require any separate account. Banks do offer FD for wide range of periods or tenures that may range between 7-10 years. To learn about the interest rate that the investment may accrue, you can use the online fixed deposit calculator. The sum of money here needs to be deposited at once. Let us now check out reasons for investing in it.
Many people wonder if fixed deposit can really save taxes. Fixed deposit is taxable and by investing on it one can save a lot of taxes. Tax saving is the chief allurement of this investment mode. Whatever interest you earn on this can help you save taxes as per the 1961, Income Tax Act.
As per your particular tax slab, you can evaluate the returns to plan finances in advance. If your annual income exceeds 10,000, Fixed Deposit will just be eligible for TDS. In case, your FD is beyond this set limit, you can avoid paying even the TDS. Consider FD across various lenders to get more benefits.
Here you get the benefit of compounded returns where the earning through this interest is always a gain. The principal amount may be withdrawn when the time matures. With the FD, an investor can even improve credit scores. Banks will offer loans, additional and secured loans based on the existing FD. If you use the credits effectively, it can certainly improve the credit score.n
In Fixed Deposit, you also have the benefit of premature withdrawal of funds or partial withdrawal of money deposited as FD. If you are stuck up in financial emergency, you can always withdraw the sum.
Those who are looking to get substantial benefits from surplus money or funds, they can get it. The best part here is that you are not exposed to the volatility of the market at all.
With FD, you will never have any hassle in securing loans from the bank. In short, it improves the credibility of investors in the market. Unsecured form of loans may even be acquired with faster approval processes.
When compared to savings accounts, FD is far better. If you have some amount of money which needs to be used to buy something, you can take Fixed Deposit to get good rate of interest.
FD is the great way to create a credit history if you have none. Thus, from the above factors it is apparent that you must go for fixed deposit.
