Saving money is easier said than done. It is a smart move to save money in the long run rather than spending less. The money can be used for a future need that might arise with a surprise. The smart savers are those who manage their expenses. First thing you need to do is make a budget and try to stick to it. Start saving from an early stage and make as less debts as possible.
Why invest in fixed deposit?Fixed deposit is a safer investment option. It is quick and easy. All you have to do is deposit a certain amount of money for a certain period of time. The interest rates provided on fixed deposits are high and you do not have to worry about losing any money. The investment period starts from 7 days and can go up to 10 years. Based on the important events in your life, you can invest accordingly so you can get the matured interest.
The interest earned is paid out in two ways: In cumulative deposits, the interest is calculated quarterly or annually but is paid out at the end of the tenure. In non-cumulative deposits, the interest is calculated annually, quarterly or at a discounted monthly rate. The interest on your money can be paid out to you on a monthly or yearly or on the quarterly basis. This way you can ensure you get a constant mode of income. Whereas on the savings account the interest earned is lower and the returns are not so high.
How do you save money by investing in fixed deposit?The banks do let you withdraw money before the maturity date, but a penalty is charged. The interest earned is lower compared to the interest earned in stock markets. The interest earned above Rs.5,000 is taxed. If the inflation is at its peak, the interest benefit is slashed. Opening a fixed deposit account means the money is not available to you for the certain period of time. Take a call on taking the fixed deposit once you know where you stand financially.
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The government’s proposed insurance bill will need the government to raise the deposit insurance cover by more than 12 times. This will be needed to ensure that the safety of more than 90 percent of deposits are covered. Covering 90 percent of the Fixed Deposits (FDs) was set as the base limit when the bill was last reviewed in the year 1993. At that time, to cover 90 percent of the deposits the amount was set at Rs. 1 lakh. However, if the government is to go ahead with the proposed bill, the cost would go up to Rs. 15 lakh as the base limit has shrunk to 67 percent as of March 2016.
Under the proposed bill, the government intends to set up a resolution corporation who in consultation with the Reserve Bank of India would fix the limit for deposit insurance. With RBI data showing that only 30 percent of the outstanding deposits being insured as of March, 2017, increment in the insured amount is necessitated considering it was fixed quarter a century ago.
3 January 2018
Fixed Deposits (FD) are one among the best tools to save money and earn interest. It is a very good option for beginners and those who are taking baby steps towards a brighter financial future. FD is also a good option if you do not want to take too much of risk but still want to earn good interest in a certain fixed period of time. There are many types of FDs that are available in the market and you can choose one according to your personal financial goals and ambitions.
6 November 2017
