Investing in equity is a risky affair due to high volatility in the stock markets. Even though it allows you to enjoy higher returns in longer run, ais a more attractive investment option that provides you security of the principal amount along with fixed returns.
Here is how you can effectively invest into earn regular income:
Do Sufficient Research:
It is important to study the fixed deposit options being offered by different lenders. You should gather information about the FD interest rates and tenures offered by different NBFCs and lenders since it is differs from place to place.
Find out About your Returns:
The interest on fixed deposits is calculated on a monthly, quarterly, half-yearly or annual basis or at the time of maturity. So it is important to calculate maturity amount and check which lender is paying you the highest interest.for analysis your returns.
Do not Invest the Whole Amount in Single Fixed Deposit:
Tax is deductible at source (TDS) if the total interest on FD exceeds Rs.10,000 in one financial year in a single branch of the lender. So if you want to avoid TDS then you should not invest whole amount at a single branch. Splitting your FD investment into different accounts also helps in case of a financial emergency, when you do not have to break all your FDs.
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Reinvestment of Interest Amount:
While opening an FD account, lenders give you an option to withdraw your interest income into your account or reinvest it. If you reinvest your interest of the previous year in same FD then you can earn higher interest since the compounding of interest comes into effect. So if you are not in need of a regular income, reinvesting the interest will be more beneficial in the longer run. Such fixed deposits usually have a lock-in period of 2 to 5 years and total income from the interest and the principal amount is paid on maturity.
FD held Jointly with a Senior Citizen Earns Higher Interest:
There is an additional interest rate of 0.5% to 1% for the FDs held by senior citizens. This is because senior citizens need additional income in their retirement years and so lenders often offer them a. If you open a fixed deposit with a senior citizen jointly then you also become eligible for higher rate of interest.
Save tax with Tax Saving Fixed Deposits:
Any investment made in the tax saving fixed deposit is eligible for deduction under section 80C up to an extent of Rs.1,50,000 per annum. Thus, investing in this FD helps in save taxes along with earning a.
Investment in Fixed Deposits with interest rates starting at 8.05% along with various benefits like easy online application process, online fixed deposit calculator, flexible tenures, various interest payment options on non-cumulative FDs as well as convenient online FD management tools.