Most people are familiar with term deposits. They are relatively risk free and hence are quite popular among people. People tend to invest their hard-earned money in term deposits as there are few chances of losing it. Fixed Deposits and Recurring deposits are the two types of term deposits.
FDs are long term deposits and you can expect earning a good interest on. But paying taxes on the interest you earn can reduce your profitability. Therefore, you should be careful while investing in them.
FDs are when investments are done only once in the whole tenure of the deposit. If you invested in a FD then you will keep earning interest upon it. The choice of earning the interest on monthly basis or once the FD matures is completely yours. Now recurring deposits are deposits where in you keep depositing a sum on periodic basis in a given time frame. You earn an interest on the investments you make in RDs.
You are liable to pay taxes on FD if the interest you have earned exceeds Rs. 10,000.
There are Some Tips by which You can Save on taxes:
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.