Fixed deposit (FD) is one of the attractive investment mediums among Indian investors. The reason for this is the lack of risk on deposits and a fixed return on investment. If you are planning to invest in FD in the midst of Corona crisis, then you can choose the best FD by taking care of a few things. Let us tell you what five things should be taken care of before investing in FD of a bank.
1. Loan facility on FD
Most banks provide loans above FDs. Banks provide loans up to 90% of the amount deposited in your FD. However, instead of this, they charge 0.5 to 2 per cent more than the interest paid on FD. In such a situation, while providing FD, also keep in mind that at what rate banks will provide loans if needed.
2. Premature Withdrawal Fee
Many times we make FDs to meet a financial goal, but FDs have to be broken when there is a need. Banks charge penalties ranging from 0.5 per cent to one per cent on withdrawals before the completion of the FD deadline. At the same time, there are some banks that do not charge any fees on withdrawals from FDs at any time.
3. Take care of the interest rate
To get more returns from FD, the most important thing is that you choose the place where you are getting more interest on FD. You can also FD in the bank and also in the post office. Keep in mind that interest will be paid every quarter on the bank’s FD, while on the post office FD throughout the year. In such a situation, if the interest rate is equal in both the places then getting FD in the bank is more beneficial. Before getting FD, a comparison should be made between the interest rate offered by banks.
4. Take care of tax exemption too
While providing FD, do not just look at the interest, but look for such places where you will also get benefit in tax. If you save tax, then your return from FD will increase automatically. You can also take advantage of tax on a five-year FD in a bank.
5. Bank’s Credibility
In the last few years, due to the sinking of many banks, investors have faced problems. In view of this, do not get FD in any bank in which interest is getting high but its credibility is low. It can be a problem later.
