Fixed Deposit (FD): We all must have heard about FD at one time or another that by doing FD of so much money, the money will become double in 3 or 5 years. Now that you have money and you want to invest it in the right place, then you must have thought of fixed deposits. What is Fixed Deposit (FD) and how? How much interest do we get on FD? After how much time the money becomes double and what are the more advantages of FD and the disadvantages of breaking FD before completion of time? Today we will answer these questions to you in detail below.
WHAT IS FIXED DEPOSIT:
The common man always tries to save something from his salary so that he can come in handy at the time of need. When we deposit money in a savings account in a bank, the interest is very less. In such a situation, the easiest and most beneficial way to invest money with a good interest rate without risk is Fixed Deposit. In which we invest money for a fixed time, on which we get interest, the rate of which is much higher than the interest received on savings account deposits.
You can do FD from any bank. All banks in India allow you to make fixed deposits. Fixed Deposit, as its name suggests, money is put in it for a fixed time. We would have had to withdraw the money before that fixed time. However, we can get the FD broken in case of an emergency. How long are the FDs, it is up to us. FD can be done for both short and long term. FD can be done for at least one week and maximum for 10 years.
HOW MUCH INTEREST IS AVAILABLE ON FD
FD interest rates may be different for every bank . Which ranges between 6% to 9% annually. The interest rate at the time you get the FD will be the same till the end. How much interest rate you will get on Fd will also depend on how much time you are getting Fd done.
The longer the FD is, the higher the interest rate will be on it. The interest rate on FD is much more than the amount deposited in the savings account. Below we have made a list of some popular bank’s fd interest rate, in which you will be able to know how much interest you can get from which bank to get FD.
State Bank of India (SBI) : 5.75% – 6.85%
Punjab National Bank (PNB): 5.70% – 6.75%
ICICI Bank: 4.00% – 7.50%
HDFC Bank : 3.50% – 7.40%
Syndicate Bank : 4.75% – 6.80%
Central Bank of India: 4.75% – 6.60%
Bank of Baroda : 4.50% – 6.85%
Axis Bank : 3.50% – 7.60%
Kotak Mahindra Bank : 3.50% – 7.30%
How much interest rate will be available on making FD from any bank and how much interest will be received on completion of FD or in how much time will the money be doubled ? To find out all this easily, go to the FD Calculator .
BENEFITS OF DOING FD: FIXED DEPOSIT BENEFITS
The biggest advantage of getting FD is that you get good interest on your money and there is no risk on it. Your money remains safe, no matter how many ups and downs in the market, you will get assured interest.
You can continue to take the interest received on your fixed deposit monthly, quarterly as well.
If you have an emergency, you can also take a loan against your FD. You can easily get a loan up to 90% of the total amount of your FD, on which the interest rate is also not high.
We also get tax exemption on FD. With 80c tax deduction, we do not get any tax on FD up to 150000.
Senior citizens get additional interest rate on FD which almost every bank gives. For example, in SBI FD plan, normal citizens get 5.25-6.25% interest rate on FD, while senior citizens get 6-6.75% interest rate.
We also get the option of Reinvest from the bank, under which we can re-invest our FD amount in another new FD.
HOW TO DO FD (FIXED DEPOSIT) ONLINE OR OFFLINE
There are 2 ways to get FD first online and second offline. If Internet Banking of your bank account is activated then you can easily open FD account sitting at home. All you have to do is log in to your internet banking and there you get the option to make FD. A form will be available in that option, by which you can get FD done.
Another way to get a fixed deposit is to go to the bank and get an FD. There you will have to fill a form to get the FD, in which you will need your Identity and Address Proof, PAN card along with passport size photo. Along with the form and necessary documents, you will have to deposit the amount that you have to make FD there. After depositing the money, you will get an FD receipt which you have to keep with you.
DISADVANTAGES OF PREMATURELY BREAKING FD
When we get FD, our money is deposited in it for a fixed time on which we get interest. But sometimes due to some urgent work or emergency, we need money, due to which the fd is in danger of being broken before maturity. In such a situation, we may also have to bear some losses. We get a penalty from the bank for breaking the yellow FD after the completion of time.
There is a penalty of 0.5% for breaking an FD of less than 5 lakhs taken from SBI Bank. Similarly, breaking the FD done from other banks also incurs a penalty. Apart from this, the interest we should get on FD will also be less.
Before getting the fd done, if you think that money may be needed before the time is over, then instead of getting your entire savings done, get many fds done for a small amount of money. For example, if you have 5 lakhs that you want to put in a fixed account, then get 5 fds of 1-1 lakhs instead of the full 5 lakhs of fd. So that if money is needed, then one FD is broken, it will reduce the loss.
Instead of breaking the FD before maturity, another option comes to take a loan on FD. On Fixed Deposit, we can easily get a loan from the bank, whose interest rate is also not high.
