Fixed Deposit : It has been a favorite means of investment for years. Even today many people like to include FD in their portfolio. But if you are investing in FD without thinking, then this is also not right. Ignoring some things can prove to be harmful for you. Here know the 5 things that should be kept in mind while making FD.
Do not invest money in a single FD
If you want to invest a large amount, then do not invest it in a single FD. Invest it in FDs of different periods. For example – Suppose if you want to invest Rs 5 lakh, then instead of investing it together in a single FD, it is better to make 5 FDs of Rs 1 lakh each for different periods. In this way you will also have liquidity and you will also be able to take advantage of better interest rates.
The purpose of investment is that you get maximum benefit. For this, it is not necessary that you make FD in a government bank only. In a government bank, you will get a maximum of 6 to 7 percent interest. In such a situation, for more benefits, you can also look for options in private sector or small finance banks. Here you can get better interest.
Income tax rules
Your FD income is also taxed according to the income tax slab, you should be aware of this. If the interest received on FD in a financial year is more than Rs 10,000, then TDS is deducted on that interest. This will be 10% of the total interest earned. For senior citizens, this limit is 50 thousand. However, if your income is less than the taxable limit, then you can submit Form 15G and Form 15H in the bank to avoid TDS deduction on FD.
Think about the duration
If you are going to do only one FD, then clarify the duration in advance. If you have done a long-term FD and have to break it in the middle when you need money, then you will have to pay a penalty. To avoid this, think well about the duration before doing FD.
Higher interest for senior citizens
Senior citizens are given .50% more interest on FDs. Banks also give 1% more interest on some special FDs. In such a situation, you can avail the benefit of higher interest by making FD in the name of senior citizens.
