“Compound Interest is the eight wonder of the world. He who understands it, earn it. He who doesn’t pay it !”
Benefits of Fixed Deposits (FD)
A fixed deposit is a financial instrument where an investor gives a certain sum of money to a bank or a financial institution (company) and the entity pays interest for the duration of the deposit. The rate of interest paid varies depending on the amount and tenure. Investor’s, especially conservative investors, prefer to open fixed deposits as it is a safe investment option and it can be opened easily and quickly.
The reasons why fixed deposits are an ideal form of investment are as follows:
Guaranteed returns: Unlike investment in the stock market or commodity market, fixed deposits are not a risky investment as they do not depend on fluctuating market rates. Investors can rest assured that his investments are safe and he will be getting back a guaranteed amount at the end of the tenure.
Easily withdrawal: The amount that is invested in fixed deposit can be withdrawn at any time for a small penalty. The investor may have a financial emergency to meet financial needs during marriage, sickness or when his business is in loss. The penalty is less than that of selling stocks or real estate as the asset cannot be sold easily because of its high value and if you are in a distressed situation, you will sell it for a much lower rate. Whereas, fixed deposits can be withdrawn at any time and all you lose is a certain interest income.
Flexible in nature: Fixed deposits can be taken for a tenure of 1 month or 1 year or 10 years based on your needs and for whatever amount that you can invest. Fixed deposits can be invested for a tenure of your choice. If you have planned for a big event in 5 years, then you can have a fixed deposit kept for 5 years to meet your financial requirement in 5 years. You can have various fixed deposit accounts to save for different goals.
Terms & Conditions:
- Minimum FD would be of Rs. 5,000/- and further in multiple of Rs. 1000/-
- Interest calculation quarterly compound.
- TDS Deducted as per provisions and income tax Act.
- Loan available against deposits up to 70% of deposited amount after one month from the date of deposit.
- Rate of Interest on loan against FD would be 6% higher than applicable rate of interest to your deposit.
- F.D. will not be premature within first 3 month.
- If F.D. is matured after 3 month but before 6 month no interest will be paid.
- If any person premature its F.D the the person will be paid 3% less of maturity interest after 6 month to 60 months.
- In case of death of a depositor, the company will repay to nominee or beneficiary the principle & interest, at which it was accepted.