Fixed Deposits

Fixed deposits and recurring deposits are bank deposit options that give you low-risk investment option with guaranteed returns. Here's a look at which is suitable for you, how they work and how you can use them to reach your financial goals…

Union Finance Minister Nirmala Sitharaman at a BSE event said that more and more Indians were now investing in stock markets and their household savings must be safeguarded. 'Any unchecked explosion in retail trading in the futures and options market can create future challenges for the market, investor sentiment, and household finances', she said. Watch

Banks in India offer higher interest rates on 3-year fixed deposits because of asset-liability management, competition, and liquidity needs.

Floater funds are characterized by their elevated risk profile, while FDs are generally recognized as secure investments. In contrast, floater funds tend to offer superior returns, albeit with susceptibility to market volatility.

While your fixed deposit with a bank is secured up to only Rs 5 lakh per bank, encompassing deposits held across all its branches, corporate FDs with a solid credit rating are equally secure. However, it's worth noting that they lack deposit insurance coverage and perceived government support

FDs and PPFs are low-risk investments with attractive returns. FDs offer fixed returns and liquidity, while PPFs offer tax benefits and potential higher returns.

People can track their unclaimed deposits through the Reserve Bank of India's recently launched portal called the UDGAM. Currently, the portal provides data on unclaimed deposits from 15 banks, and gradually, by October 15, 2023, the remaining banks will be added in phases.

FDs are a widely chosen method of saving, but they are not tax-efficient. The interest earned from FDs is considered a part of your taxable income. However, there are strategies to minimize your tax obligations in this regard.

The SBI Amrit Kalash scheme provides a 7.1 per cent interest rate for standard customers, while senior citizens qualify for an extra 0.5 per cent interest.

The two commonly considered options for saving money and earning interest are tax saving fixed deposits and savings accounts with a sweep-in fixed deposit features. However, each has its distinctive pros and cons depending on individual financial goals.