Fixed Deposit (FD) is an attractive investment medium among Indian investors. This is due to a lack of risk on deposits and a steady return on investment. If you are planning to invest in FD during the corona crisis, you can choose a good FD by looking at a few things. Here are five things to look at before investing in a bank’s FD.
1. Loan facility in FD
Most banks lend more than FDs. Banks lend up to 90% of the amount deposited in your FD. Instead, we charge 0.5 to 2% more than the interest we pay on FD. In this case, keep in mind the rate at which banks lend, if necessary, when offering FD.
2. Premature Withdrawal Fees
We often make FDs to meet the financial goal, but we need to break the FDs when needed. Banks impose a penalty of 0.5% to 1% upon withdrawal before the FD deadline is met. At the same time, some banks do not charge any withdrawals from FDs at any time.
3. Keep an eye on interest rates
To get the most return from FD, it is important that you choose the destination that is most interested in FD. You can also FD at the bank and post office. Keep in mind that interest is paid quarterly on a bank’s FD while in the Post Office FD throughout the year. In such a situation, it would be more beneficial to have FD in the bank if interest rates are equal in both places. Before obtaining FD, one must compare between the interest rates offered by the banks.
4. Also be concerned about tax deduction
When offering FD, don’t just look for interest, but look for such places where you can also benefit from tax. If you save taxes, your income from FD will automatically increase. You can also take advantage of five years FD on the bank.
5. Credibility of the bank
Over the past few years, as many banks have sunk, investors are facing problems. In this view, do not get FD in any bank which is increasing interest but lower its credibility. This may become a problem later.
Be sure to compare interest rates before taking a gold loan