What are FDs?
A fixed deposit is a financial instrument provided by banks or NBFCs which provides investors a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account.
What are the different categories of fixed deposits?
Regular, Corporate, Cumulative, Non-Cumulative, Tax-Saving, and Senior Citizen fixed deposits.
- Citizens of India consider fixed deposit plans to be one of the safest investments because their primary want is to remain risk free and to have benefits at the end of the tenure of a fixed deposit account.Unlike other investment schemes, fixed deposit accounts are very safe and reliable, yielding low but sure returns at the end of the tenure which the depositor has chosen, senior citizens also prefer investing in schemes that offer the best fixed deposit rates. Hence, explaining the popularity and viability of a fixed deposit account among the citizens of India
- By investing in tax-saving FDs one can save up to Rs 1.5 lakh per year per 80C of the Income Tax Act. The returns are provided on both annual and monthly basis as per the depositor’s want and selection.
Factors of Influence
- India’s economic conditions along with fiscal and monetary policies have a significant impact on FD interest rates. One can earn higher returns as per the conditions.
- Investment amount which is the opening amount of a fixed deposit account has a direct effect on the interest rate that applies to that respective fixed deposit account.
- The age of the depositor plays a huge and significant role in terms of fixed deposit returns.
Benefits Of Fixed Deposit Accounts
- In the coronavirus pandemic, several citizens are presently opting for the online mode/option to create, renew or close their fixed deposit accounts. It is simply carried out through any electronic device proving to be an efficient and user-friendly option.
- Depositors can choose the tenure they are most convenient with. It can always be less than one year and also as short as a period of 7 days and can go up to 10 years.
- It is a comparatively liquid form of investment of money, the most attractive part that the citizens are called towards regarding fixed deposits is that they can withdraw their capital investment as per their need and convenience in the time period. The amount can be availed instantly thereby making it the right investment to meet emergencies. However, we must not forget that any premature action on our part is faced with penalties.
- Before creating a fixed deposit, depositors must always be aware of the returns on a fixed deposit account. The online fixed deposit calculator can be availed at any time to calculate returns on the FDs.
- Guaranteed returns are a sure thing in the case of FD rate of returns, they are higher as compared to the banks’ respective savings accounts. The interest rate on fixed deposits varies from 3.5% to 8% per annum based on the bank and time period of your selection.
- The returns on fixed deposits are decided beforehand. The bank that ensures the interest rate to the customer should pay the promised amount without failing to do so. With guaranteed returns, there is no risk to the customer who is making avail of the deposit account.
SBI FD RATES
- State Bank of India provides interest rates on fixed deposits for periods that vary from 7 business days to 10 years with a plethora of beneficial features and advantages. Senior citizens are offered an extra interest rate. The SBI FD Rates for the general public of India is from 2.90% per annum to 6.10% per annum.
- The interest rates of SBI Tax Saving FDs is 5.65% per annum for the general public and 6.45% per annum for senior citizens who have deposits in these accounts. The State Bank of India also offers various fixed deposit benefits and products for NRIs.
Fact – State Bank of India has introduced a new term deposit scheme the “Utsav Deposit” to commemorate India’s 76th Independence Day. It will offer 6.1 percent interest rate from August 15, and is valid for 75 days that is till October 30.