Fixed deposit schemes are always a good investment option, preferred by the investors. In spite of a very good interest rate offered by the banks post, tax deducted at source (TDS) return on such investments is pretty low. Investing in bank fixed deposit schemes is extremely safe, and is also a way of gaining a fixed income on the investment made. The tenure of the fixed deposit schemes can range between 15 days to 10 years, and depending on this duration the interest also varies from 7.5% to 10% per annum.
Presently a few different types of fixed deposit schemes are available, like term or recurring fixed deposit, and tax saving fixed deposit schemes. Fixed Deposits attract TDS, if the principal amount exceeds INR 10,000 in a financial year. However, for any income less than INR 10,000 yearly no TDS is deducted. TDS at a rate of 10% annually will be deducted on your deposit, provided that your PAN card details are submitted. Otherwise, the rate of annual TDS deduction will be 20%.
Fixed term deposits are often considered as the safest and most favorable savings option by the tax experts for the number of benefits it imparts, and some of them are as follows.
At the end it can be definitely concluded that carrying benefits like assured return, tax benefits and other advantages, FD is the best risk free investment options. They are also not highly complex to understand, and it is little surprising that more often than not they are the first preference for investment for both large and small scale investors. Different banks are found to offer different rates of interest on fixed term deposits. Before you invest in one, it is good to check out the annual interest rate offered by different banks. Interest rate also keeps changing depending on the government policies and depositing with a public sector bank is always a wise choice. So, what are you waiting for? If you have surplus cash at disposal, invest it in a profitable fixed deposit scheme, today!