Fixed deposit i.e. FD is considered to be a good investment tool as it is safe and gives a fixed return, but it is also not advisable to invest in FD without thinking. There are a number of requirements to consider when making an FD, including its duration and the penalty for breaking the FD. Today we are going to tell you about 6 such things ...
It is necessary to choose the right tenor
Before investing in FD, it is important to think about its tenure. This is because if the investor withdraws before maturity, he will have to pay a penalty. FD will have to pay a penalty of up to 1% for breaking it before it matures. This can reduce the total interest earned on the deposit.
Not investing all the money in one FD
If you are thinking of investing Rs 10 lakh in FD in one bank, instead invest in 8 FDs of Rs 1 lakh and 4 FDs of Rs 50,000 in more than one bank. In the meantime, if you need money, you can manage the money by breaking 8 FDs in the middle according to your need. Your second FD will be safe.
Interest earned on FDs is taxable
Interest received from your FD is taxable as per the Income Tax Slab. If the interest earned on FD is above Rs.10,000 in a financial year, a TDS deduction is levied on it. It will be 10% of the total interest earned. The limit for senior citizens is 50 thousand. If your income is less than the taxable range, you can submit Form 15G and Form 15H to the bank for non-payment of TDS on FD.
Withdrawal of interest
The bank had the option to withdraw interest on a first quarter and annual basis. Monthly withdrawals can now be made at some banks. You can choose it according to your need.
Penalty will be given for breaking FD ahead of time
If you break the FD ahead of time, you will not get interest at the rate at which you opened the FD. For example, you get 6% interest per annum on FD of 1 lakh, but if you break it after 6 months, you get only 5% annual interest on 6 months FD, in which case the bank will pay interest at 5% on your money, 6% Will not pay interest.
No comments:
Post a Comment