Fixed deposit (FD) is a financial instrument provided by banks or Non-Banking Financial Corporations (NBFCS) which provides investors with a higher rate of interest than a regular saving account, unit the given maturity date. Peoples are investing money in fixed deposit for a long time ago because it is more secure and we know about its return when investing on its with a government guarantee.
Tax saving on fixed deposit (FD) Invest money on a Fixed deposit for 5 years and get tax free on your principal value and also tax free on interest value.
Loan benefits on fixed deposit: In case of emergency time you can get an affordable loan on your fixed deposit (FD). It means to get a loan interest rate loan than a home loan or personal loan interest. Also, you can return the loan as your time. You can get a loan facility up to 90% of your FD value. For example; your FD value is 1.5 Lakhs then you will able to get a loan of up to1.35 lakhs.
A nominal interest rate of the loan in FD: The interest rate on your loan will be 1-2% more than your interest rate. For example: If you get a 4% interest rate on your fixed deposit then your loan interest rate will be 6%.
Liquidity on FD: In case of an emergency you can withdraw money from your FD. But for this bank will charge some penalty and the penalty amount is a little bit.
Along with the changing times of today, some banks provide free insurance with FD to people. For example, HDFC bank, DCB bank and ICICI bank provide free insurance on FD for their account holders. In such banks, if you make your FD then obviously you will get free insurance.
Credit Card facility on fixed deposit: For the digital revolution bank also makes a lot of work digital and the biggest contribution of bank sector to take the country forward. Keeping in this mind banks are start providing credit card facility on FD. That is if you make an FD on a bank, then some banks offer a free credit card to you. You can get a credit card with a credit limit of up to 80-85% of the FD amount in the bank. Such an offer is very good for those people who have a low credit score or no credit score. By taking a Credit card on FD, the bank keep your deposit at the level of security for the expense made with your Credit card.
Fixed deposit is a secure investment of your future if you do not take any risk. Suppose if the bank defaults on any condition or any problem on the bank then you must think about what will happen to my fixed deposit (FD). But nothing worry about your FD because an insurance facility of 5lakh is available on FD. That is 5lakh will be available even in the bank default case.