5 Facts You Probably Didn’t Know About Fixed Deposits

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5 Facts You Probably Didn’t Know About Fixed Deposits

  • Highlights

  • Company FDs offer better interest rates than bank FDs

  • Higher interest rate for senior citizens by Bajaj Finance FDs

  • Tax exemptions on investing in FDs

  • Easy process of loan against fixed deposit

A fixed deposit is a stable investment option that offers risk-free growth of your savings. However, there’s more to earning high interest from this popular investment scheme, than just starting one. This will help you improve your financial planning, so you refrain from making any poor decisions.
Here’s a look at 5 lesser known facts about FDs that will help you make the most of investing in this instrument:

Fact 1: Company FDs yield higher returns

Banks and NBFCs offer fixed deposits, but bank FDs aren’t the most beneficial ones to choose. This is because they offer a relatively low rate of interest. Company fixed deposits on the other hand give you the benefit of higher rates of interest. This means that you can multiply your investment corpus and get better results in the same span of time.

When you open a company Fixed Deposit with Bajaj Finance for example, not only do you enjoy high credibility and safety, you can also benefit from a high interest rate, flexible tenor and a minimal investment amount.

Fact 2: If you are a senior citizen you can get a higher interest rate

If you qualify as a senior citizen, you can get a higher rate of return on your investment. Bajaj Finance offers one of the highest interest rates in the market, with additional interest for senior citizens. This makes financing your post-retirement life hassle-free and comfortable. You can further benefit by choosing a non-cumulative fixed deposit to get periodic returns that replace a salary.

Fact 3: You can get a loan against your fixed deposit

There can be numerous instances where you need additional finances that you can’t meet with just your savings. In this situation, you can turn to your fixed deposit for assistance. By using your fixed deposit as collateral, you can get a loan against it. Typically, the loan value is about 70% of the value of your FD investment.

Investment options to secure your child’s future

Why should you take a loan against your FDs?

For handling emergencies, you need not break your fixed deposits prematurely. Instead, you can opt for a loan against fixed deposits to cater to your immediate requirements. Taking a loan against fixed deposits can be a hassle-free process, which helps you take care of your financial needs, ranging from holidays, weddings, sudden large purchases, to emergencies.

With loan against FDs, you can benefit from the following:

High loan value
Minimal documentation
Quick processing
Flexible repayment options
No additional charges

Getting a loan against FD is hence, a hassle-free process! Here are some simple steps to take a loan against fixed deposits:

Bajaj Finance helps you fulfil your financial needs easily, so you can keep enjoying high returns from your fixed deposits.

Fact 4: You can use this investment to save on taxes

As per income tax regulations, interest income up to Rs.5,000 from company fixed deposits is free from taxation. If your total taxable income, including interest from FDs is lower than the taxable amount, you can submit form 15G/15H and not pay any tax on this amount.

Fact 5: First account holder has to pay TDS in case of joint accounts

It is possible that you choose to open a bank FD jointly, with your spouse, sibling or parent. In such a case it is important to know that the first account holder will have to pay TDS(Tax Deducted at Source) over the returns. Similarly, the interest is also paid to the first holder’s account.

Having a detailed understanding about fixed deposits will allow you to invest in FDs smartly. Armed with these facts, you will be able to enjoy maximum benefits when you invest in fixed deposits and you will also get clarity on how to maintain your investment.

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