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New Delhi25 minutes ago
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Fixed Deposit i.e. FD is a popular means of investment in our country. People consider it safe and in this they get fixed returns. However, before investing in FD, you should know about many things related to it. Today we are telling you about 5 such things about FD, which is important for you to know.
Penalty to be paid for breaking FD prematurely
If you break FD ahead of time, then you do not get interest at the rate at which you have FD. For example, suppose you have FD of 1 lakh rupees for 1 year at the rate of 6%, but you break it only after 6 months and 6 months FD is getting interest at the rate of 5% per annum, so In the bank, the interest will be paid on your money at the rate of 5% and not at the rate of 6%.
According to the rule of the country’s largest bank SBI, if a person makes an FD of up to Rs 5 lakh, then he will have to pay a penalty of 0.50% on breaking it before the FD matures. Similarly, 1% penalty on FDs of more than Rs 5 lakh and less than Rs 1 crore will have to be paid if they break before time. After ensuring the interest according to the period (as mentioned above) you are paid your money by deducting 0.50 or 1% interest according to the FD amount. Most banks charge a penalty of up to 1%.
Tax has to be paid on FD also
The interest income earned on your fixed deposits is taxed as per the income tax slab. If the interest earned on FD is above 10 thousand rupees in a financial year, then TDS deduction is made on that interest. This will be 10% of the total interest earned. This limit is 50 thousand for senior citizens. However, if your income is less than the taxable range, you can submit Form 15G and Form 15H to the bank for not making TDS deduction on FD.
Can take loan on FD
You can also take a loan on your FD. Under this, you can take a loan up to 90 percent of the value of FD. Suppose your FD is worth 1.5 lakh rupees, then you can get a loan of 1 lakh 35 thousand rupees. If you take a loan on FD, you will have to pay 1-2% more than the interest you get on a fixed deposit. For example, suppose you are getting 4 percent interest on your FD, then you can get a loan at 5 to 6 percent interest rate.
Can take credit card on FD
Most banks offer credit cards against fixed deposits (FDs). A credit card with a credit limit of 80-85% of the FD amount can be found in the bank. Such an offer is good for those who have no credit score or who have low credit score. By taking a credit card on FD, banks charge your deposit as a security for the expenses incurred by the credit card.
Insurance of 5 lakhs is available on FD
Your money will be safe in FD. Here the insurance facility of up to Rs 5 lakh is available on the deposit amount. This means that if the bank defaults under any condition, then the government will be guaranteed on your 5 lakh rupees. That is, in the default case, you will get 5 lakh rupees.