- Senior Citizens Enjoy Higher and Fixed Interest Rates on FDs.
The interest rates on fixed deposits (FDs) are fixed and vary based on the investment tenure. Generally, longer tenures attract higher interest rates. It’s crucial to compare interest rates offered by different banks and financial institutions before opening an FD account.
- Interest Rates Remain Fixed After Deposit.
Once you invest in an FD with a specific interest rate, that rate remains constant throughout the deposit period. Even if the interest rates change for new deposits, it won’t impact the interest rate on your existing FD.
Senior citizens often receive an additional interest rate boost on their FDs, typically around 0.50% per annum, along with special rates for women depositors.
- Choose When to Withdraw Interest.
Investors can decide when to withdraw the interest earned on their FDs. They can opt for cumulative or non-cumulative FDs based on their preference for periodic payouts. Many banks now offer monthly interest payouts, making it suitable for retirees seeking regular income.
- Flexible Fixed Deposit Tenures.
FD tenures vary widely, ranging from as short as 7 days to as long as 10 years. Investors can select a tenure that aligns with their financial goals, with common options being 1 year, 2 years, 5 years, or 10 years.
- Tax-Saving Benefits of FD Investments.
Interest earned from FDs is subject to tax, and if it exceeds a certain limit, TDS is deducted. Investors can avail tax deductions under Section 80C by investing in tax-saving FDs with a lock-in period of 5 years.
- Nominate Beneficiaries.
When opening an FD account, it’s important to nominate beneficiaries. This ensures that, in case of unforeseen circumstances, the nominee receives the invested amount without complications.
- Auto-Renewal Option for FDs.
FD account holders can opt for auto-renewal, where the principal amount and accrued interest are reinvested automatically upon maturity. This provides a hassle-free investment experience.
- Auto Credit Facility for Maturity Amount.
Banks offer an auto-credit facility, depositing the entire FD amount into the account at maturity, saving investors the effort of closing the FD manually.
- Premature Withdrawal and Loan Options.
Premature withdrawal of FDs is possible but comes with a penalty. Alternatively, investors can opt for a loan against their FD, securing funds without prematurely closing the deposit.
- Sweep-In Facility for Investment Flexibility.
Some banks provide a sweep-in FD facility, converting excess savings above a set threshold into an FD. This offers better returns compared to a regular savings account, and funds can be instantly withdrawn without penalties.
In Conclusion:
Understanding these aspects of fixed deposits empowers investors to plan wisely and align their investments with financial objectives. Shriram FDs, with competitive interest rates, provide a secure avenue for low-risk, high-return investments. Investors can use the hassle-free FD interest calculator to calculate returns before making an investment.
