With a growth in the number of fixed deposits, financial institutions and NBFCs are set to increase their interest rates. The interest rate depends on specific factors such as the deposit tenor, investment amount, type fixed deposit, age of applicant, etc.
Fixed deposits also offer you with an Online Fixed Deposit (FD) Calculator using which you can determine your returns. There are two types of interest rates applicable on FDs, simple interest rate and compound interest rate. The formula to calculate simple interest rate is SI = P X R X T/100, where SI is simple interest, P is invested or deposit amount, R is the interest rate, and T is the deposit tenor. To calculate compound interest, you can use the same formula, and the amount will be calculated for each year. The interest amount calculated for one year will be added with the principal amount on which the compound interest rate for the second year will be calculated. For any Fixed Deposit (FD) with a tenor below or above 5 years with an interest amount above Rs. 10,000, your financial institution or NBFC will deduct TDS. You can claim TDS exemptions at the end of each financial year by submitting Form 15G or Form 15H (for senior citizens.) You can also avail emergency loans against your fixed deposits of up to Rs. 4 Lakh to meet several expenses like medical costs, education fees, etc.
1 Comment
enior citizen fixed deposit scheme is an attractive investment scheme for the individuals who are looking for a comfortable life post retirement. With secured returns at attractive interest rates, it is highly preferable for retiree individuals.
With a fixed deposit scheme, you get the most secularized form of investment. You can also opt for premature withdrawal during emergencies against nominal fees. You can simply open an FD account with the most simplified application procedure. Also, you can avail loan against your FD at times of emergency. On the contrary, Senior Citizen Savings Scheme is a government sponsored scheme. Although it functions to provide a regular flow of income to the retirees, it differs in a way that it has a limited tenor unlike the FD scheme which has flexibility in tenor and can be extended too. However, you cannot avail a loan with this investment. Additionally, the SCSS or Senior Citizen Savings Scheme has a cap over investment too, which is absent in case of FD, making it preferable. Altogether, a senior citizen fixed deposit is more preferable option than a Senior Citizen Savings Scheme. |
CATEGORY
About Author:Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms. Archives
August 2022
|