Fixed Deposits (FD) are an investment tool that is offered by the banks and also some non-banking financial companies, in which a person keeps his/her money in an expectation of getting a rate of interest higher than what a saving account provides. The money in Fixed Deposit can be deposited for a specific period of time ranging from 7 days to 10 years. The significant criteria for Fixed Deposits are that the sum deposited cannot be withdrawn before its maturity of term chosen, but a withdrawal before maturity can also be done with a penalty payment.
One can calculate as to how much their investment becomes at the end of the said tenure via Fixed Deposit Calculator. The FD Calculator provides you an indication of how much return you can anticipate based on your sum of investment. FD’s can be done for your forthcoming needs and can be made use of as per your necessities. Raise your savings with Fixed Deposits and acquire good returns. But before you invest, use the Fixed Deposit Calculator provided by various Banks and get an educated guess of your investments & the returns on them.
Features of Fixed Deposits:
- Fixed deposits facilitate the investors to receive higher interest on their surplus funds.
- In a fixed deposit account one can deposit money only one time, and to deposit any additional money, they need to create another account for the same.
- However liquidity in fixed deposits is a bit reduced, one can always eye upon upper rates of interests, which are greater in respect of company fixed deposits
- FDs can be renewed without any difficulty
- Tax is subtracted at source, from interest on Fixed Deposits as appropriate (as in accordance with the Income Tax Act, 1961)
Benefits of Fixed Deposits: There are a number of benefits of fixed deposit investments, some of which have been given below:
- They have proven to be the safest investment option so far, and present better stability
- Returns on fixed deposits are guaranteed, and there is no threat in terms of any loss of the principal amount
- There is no influence of market instabilities on the fixed deposits, which guarantees the greater security of one’s investment capital
- You can get advantages of higher interest rates presented by company fixed deposits
- Many of the financiers also offer higher returns for senior citizen people
Taxability on Fixed Deposits:
The interest grossed on fixed deposits comes under a taxable income. The tax subtracted at source on FDs can range from 0% to 30%, dependent on income tax bracket of the investor. Financiers subtract 10% TDS if your interest received is more than Rs. 10,000 in a year, if your PAN details are existing with them. On the other hand, in an event wherein your PAN information is not given to your financial institution, 20% TDS is liable to be deducted.
If your whole income is lower than the minimum tax slab of 10%, you are entitled to a refund claim of the subtracted TDS. You can moreover evade the deduction by providing Form 15G to your financial institution, and submit Form 15H if you’re a senior citizen. If you fall in the higher tax range (20% or 30%), you would need to pay extra tax over and above the TDS subtracted by your NBFC or bank.