Amidst the current market volatility, fixed deposits remain a reliable and practical investment option offering stability, security and tax benefits. Meanwhile, the government has increased the TDS limit for bank FDs. It has been increased from Rs 40,000 to Rs 50,000 for general individuals and from Rs 50,000 to Rs 1 lakh for senior citizens.
The first quarter of any year is crucial for tax savings and investment decisions. At this time, we all make important decisions regarding financial security. Amidst the ongoing fluctuations in the market, Fixed Deposit (FD) remains a reliable and practical investment option providing stability, security and tax benefits.
The recent budget announcements have made FDs more attractive. The government has increased the TDS limit for bank FDs. It has been increased from Rs 40,000 to Rs 50,000 for common individuals and from Rs 50,000 to Rs 1 lakh for senior citizens. Let us know about the major benefits associated with investing in FDs…
Huge uncertainty in the market
Stable option in volatile market These days, there is huge uncertainty in the market due to political tensions and fluctuations in interest rates at the global level. Short-term volatility is keeping investors worried amid the possibility of long-term gains.
The market is not happy even with the income tax exemption and the cut in the repo rate. In such times, FD has emerged as a strong support. With assured returns unaffected by fluctuations, it provides peace of mind to risk-averse investors. FD is a better option for those looking for regular income.
Tax benefits with security: FD offers a perfect combination of savings and tax efficiency. Tax savers can get a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act through FD, which has a lock-in period of five years.
FDs are more attractive due to simplicity and assured returns compared to other tax-saving instruments like ELSS (Equity Linked Sewing Scheme) and ULIP (Unit Linked Insurance Plan).
Overdraft facility: In emergency economic situations, FD provides an excellent solution to get the required funds while maintaining the investment. Through the overdraft facility, banks provide a credit line by accepting the FD as a guarantee.
Customers can take a loan up to a certain percentage of the total amount of the FD. Interest is payable only on the amount used. Since FDs are guaranteed, banks usually offer loans at competitive interest rates.
Convenience: Along with security and returns, it is also a better option due to its simplicity and easy availability. Whether through a bank branch or online on a digital platform, opening an FD account is very simple. No special financial expertise is required to understand its terms and conditions. Features like auto-renewal, nomination and online tracking are also available, which make it a symbol of convenience as well as security.
Uttam Tebriwal, Deputy CEO, AU Small Finance Bank, says that while evaluating your investment options during tax planning this year, consider the lasting benefits of FD. Whether your goal is to save for future expenses, get tax benefits or just grow your savings steadily, FD will remain a reliable companion in meeting your financial goals.
Smart investing not just means earning high returns but also ensuring peace of mind, and through FDs you can have both.
