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Fixed Deposits: A smart Investment

Living in the hustle bustle of today’s world people want faster returns on their investments. People generally invest in high risk investments like stocks and mutual funds as they fetch them higher returns. But not everyone is looking towards high risk investments, there are many investment options which are almost risk free. Fixed Deposits or FDs are one such investments and are considered a safer option when compared to stocks and mutual funds. Fixed deposits fall under category of term deposits, the interest rates are not volatile and market forces don’t have any impact on them. Salaried people find FDs attractive because:

  1. It is one of the safest options and you can earn high rate of interest on FD investment scheme.
  2. You can lock in all your surplus amount for a fixed period of time from 3 months to 5 years
  3. Rate of interest is not subject to market volatilities.
  4. FDs can be insured. If you insure your FD by an amount of Rs. 1 L. you will still get your money bank even if there is failure.
However, you need to pay a tax if you earn more than Rs. 10,000/- as interest on your FD investment. You can have more than one FD accounts in more than one Bank and NBFC in case you are earning more than Rs. 10,000/- on interest by splitting your investment amount. Take the help of various calculators to understand how. You should also research on the maximum interest rates that you can avail from a bank or NBFC.

Read Also: Common Questions for Investors

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