Fixed deposits (FDs) are considered to be one of the safest styles of investments and they offer assured returns. In a FD, you make investments a lump sum to your financial institution for a hard and fast period at a pre-determined interest rate. In India, time period deposits are one of the maximum famous ways of saving money. Banks across the u . S . A . Have been elevating the interest charges on their FDs when you consider that May this yr after the Reserve Bank of India started out elevating the repo fee to comprise inflation. So, this can be considered to be the best time to invest in FDs. But earlier than you put your money within the scheme, you have to realize the types of FDs which can be available.
So, here are some kinds of constant deposits in which you may invest your money:
Cumulative FDs: The hobbies earned on these deposits are compounded in step with the c language of investor’s preference, and delivered to the primary amount. You acquire the returns while the FD matures.
Non-cumulative FDs: In non-cumulative FDs, traders receive the interest charge on ordinary periods. It is right for those who want to earn a regular income thru their investments. The interest can be paid to the buyers in their bank bills on a monthly, quarterly, half-every year or every year foundation.
Standard FDs: Standard FDs are the primary kind of FDs in which you invest your cash for a set time period, which levels from seven days to 10 years. In this sediment, the interest quotes you earn are predefined and extra than the ordinary savings account. One additionally gets loan and overdraft facilities against trendy FDs.
Senior Citizens FDs: These FDs are to be had for senior citizens (people of 60 years of age or above). Senior residents are paid a better return on term deposits in assessment to everyday individuals.
Flexi FDs: Flexi FDs provide the power and convenience of a set deposit in addition to a financial savings account. You earn better hobby rates like FDs, whilst getting liquidity of financial savings accounts.
Tax-Saving FDs: These deposits have a lock-in duration. This implies that you can’t withdraw your cash earlier than the tenure ends. This form of FD is right for those who need to say tax exemptions of a most of Rs 1.5 lakh below Section 80C of the Income Tax Act.