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?
It helps you save money for a longer period without having a chance to withdraw.
You earn higher rate of interest compared to depositing in a savings account.
The returns on your investment is guaranteed.
In case you have incurred a loss in your business, the fixed deposit amount gives you a security net. The banks provide loan on the fixed deposits up to 70-90% of the amount is given as credit.
The interest can be earned at maturity or annually or on a monthly basis at a discounted rate. This ensures your cash flow.
You can choose the tenure of investment. The tenure ranges from 7 days- 10 years.
To meet the financial obligations on your future known events of life, you can make investments in various fixed deposits so that they mature around the time you need the money.
You can get a credit card from the bank without even having a CIBIL score as the bank provides credit against 70-90% of the fixed deposit amount. This way you can get a start on the CIBIL score as the banks need you to have a credit information recorded with CIBIL to provide you loans.
While you have loans and credit cards taken against the fixed deposit, you will not stop earning interest on that amount. The banks use the fixed deposits as securities to offer you loans and credit cards.
Some banks offer you EMI cards, which will give you a certain limit of credit. The purchases made on this card can be repaid on an EMI basis.
The interest earned below Rs.5,000 has no tax deductions at source.
Fixed deposits up to Rs.1 lakh for 5 years are eligible for tax deductions under Section 80C of the Income Tax Act, 1961.
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.
Insurance cover needs to be raised to ensure safety net for 90% of FDs
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
FD, a good way to start saving money
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.
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I have chosen my fixed deposit scheme from State bank of India because I'm maintaining my salary account with them and they provided rate of interest is fine for me. I have invested the money of Rs. 2.75 lakhs. There is a locking period of 45 days. They are giving interest rate of 4.5%. Overall, I'm satisfied with their services.
I have been investing the money of Rs. 3 lakhs for the fixed deposit. I have selected Kotak mahindra bank for the FD because their net banking facility is very different when i compared to other. I can access everything regarding the account hence its easy to handle the transactions. I'm not sure about the interest rates. 7 months before, i have invested the money.
Its because of the competitive interest rates, i have selected the Fixed deposit in Kotak Mahindra bank. I have invested the fixed deposit 1.5 years ago and there is a lockin period of 5 years. They have invested the amount of Rs. 7.5 % and the employees are helpful in the branch.
I have a Fixed deposit in Axis bank. I have invested the money of Rs. 10000 for two FDs. There is a lockin duration of 1 year. They are giving a interest rate of 7%. Through net banking, i have activated this Fixed deposit. There is no tax benefits available. Axis bank service has been good. Overall, I'm happy about their services.
Since last 15 years, i have a account with Oriental bank of commerce thats the reason i have invested the money in fixed deposit with the same bank. I have invested the amount of Rs. 11 lakhs. They are giving the interest rate of 6.5%. There is no locking period but i have chosen the duration of 1.5 years. There is no additional charges deducted for this fixed deposit.
Interest rate is very low in Indian post office Fixed deposit scheme because they are providing only 8.5%. I have chosen this office because of the child benefits. I have invested the money of Rs. 1.5 years. Its 3 years lock in period. Overall, I'm satisfied with the service provided by post office employees.
I have invested the money in SBI for a fixed deposit and based on my wife recommendation i have chosen it. They are providing the interest rate of 7.25%. They have option to select the lock in period in that i have chosen 5 years. We had visited their branch and the response was good.
Its easy accessible and to redeem so that i have invested the money in Fixed Deposit with HDFC BANK. I have invested the money of Rs. 2.5 lakhs and they have provided me a interest rate of 7.5%. There is no locking period. I didn't got any additional charges till now.
I have paid the money of Rs. 4.5 lakhs as a fixed deposit in the Indian post office. For the safety purpose, i have chosen the post office account. They are offering me a interest rate of 7.9%. There is a lockin period of 5 years. If i withdraw the money in 1 year, they will reduce the interest rate of 2% and after 3 years, its 1%.
Interest rates are less in Central Bank of India so I had taken a fixed deposit. I have invested the money of Rs. 1 lakh in my wife's name. Branch is near from my place so I have chosen this bank. Yearly once, I get the money of Rs. 6,765 for the interest. There is a locking period of 1 year.
I am doing Fixed Deposit with ICICI BANK and its been around 5years. They haven't been paying good interest and its more or less same like other banks as I used to hold my salary account with ICICI, I have decided to be with one bank. There is no locking period and its flexible. They do give good support and the app is user friendly. Even deposit account can be opened through i-mobile or net banking itself.
I had a Fixed Deposit in State Bank of India, I have completed the tenure before 3months ago. I have no issues with the customer service. They are given me 7% interest rate for 2years. There is no profit and processing fee. I got an online access, where I can check the interest rate anytime on the YONO app or else SBI online.
I have invested some money through FD. My salary account is in SBI so i have a zero ATM charges and the limit is not actually set by SBI. They do have short term FDs which is pretty good. I have invested the money of Rs. 60000 and the interest rate is 10.01% for the tenure period of 16 months. There is no lockin period. There is no hassle to getting the money back.
I have invested the money in Dena bank through Fixed deposit and the growth is not that much good. They are not taking any hidden charges. Only because of the Government undertaken bank, i have selected them. They are providing a interest rate of 6% per annum. I have invested the money of Rs. 2 lakhs. There is a lockin period of 1 year.
I have opt for fixed deposit for the tax saving purpose because I have chosen five years tenure with AXIS Bank, still its going on. Only once I Invested my money it has the locking period of five years. I have option to check my transactions through mobile app. But I have concern about the interest rate is very lesser for this FD.
I had fixed deposit with SBI then I withdrawn the amount, I done Rs. 3 lakhs of investment on my daughter name then I taken the liquidity to purchase the land, at the time I struggled a lot to take that money because the process was difficult to withdrawn the money after seven months of tenure.
I had a Fixed Deposit with Union Bank of India and its closed 18 to 19 months due to personal reasons. I am doing investment but my experience is not good with FD account. In my home town, there is no other banks so just decided to go with this bank. The returns are good.
I have one FD with HDFC, I deposited Rs. 1 lakh, I was opt for 45 days of tenure. Finally I got 6.25% of interest for 45 days. It won't cover the tax, if we need tax benefits we should go for five years term. I can track the details through netbanking, on the maturity date the amount credits automatically in the account. Even the notification can customized.
HSBC staff wrongly pre closed my fixed deposit .. and calculated the interest rates wrongly and when asked them for clarification never got back .. even after following up with them repeatedly for more than 3 months.. would highly recommend not using their services.
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A V kumar
Reviewed on Aug 24, 2019
I do have a Fixed deposit account with SBI and it was carried out by Mom and even I have account for my daughter. Its still running and they have Google application separately to access online. The returns are good. I am doing monthly investment and it was opened quite a long may be 4 years.