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Are FDs useful only for retirement?

By Finserv MARKETS - Aug 26,2019
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Are FDs useful only for retirement

Fixed deposit accounts have turned out to be the preferred mode of investment for senior citizens due to the host of features they provide. For the senior citizens — the elderly — FDs come with tax benefits and a higher rate of interest. Unlike other market-linked instruments such as mutual funds where you are not certain of your returns, fixed deposits have a definite rate of interest. You know about the interest you will be earning and the amount you will be getting at the maturity period.

FD benefits for senior citizens

Most banks provide a higher rate of interest on fixed deposit schemes for senior citizens. Fixed deposit accounts for senior citizens on Finserv MARKETS offer an additional interest of 0.35 percent over a stable 8.40% interest rate. Besides this, senior citizens also have access to options such as periodic payouts which can help them better manage their funds.

Due to these factors, FDs have become a popular option when it comes to saving money for retirement, as the payout for these accounts can also happen through monthly installments — a sort of pension after people have stopped working and getting fixed salaries.

FDs for senior citizens come with several tax benefits as well. Interest earned up to Rs 10,000 is exempted under Section 80TTA of the Income Tax Act. The Union Budget 2018-19 added another sub-section — 80TTB — under which senior citizens can claim a deduction of up to Rs 50,000.

As per the new tax laws applicable from 1 April 2018, if senior citizens have earned less than Rs 50,000 in the form of interest from their FD, they will not be charged with any TDS. The TDS is only charged if the interest crosses Rs 50,000 in a year. Banks deduct TDS at 10 percent if PAN information is provided; otherwise, TDS is deducted at 20 percent.

More than just retirement benefits

It is a popular notion that fixed deposit accounts are just for old age people so that they can have financial aid for their retirement years. However, fixed deposit schemes are more than just that. If you are new to investing and don’t want to take any risk when it comes to your hard-earned money, fixed deposits are your go-to savings option as they offer a risk-free investment mode with guaranteed returns.

Fixed deposits have a higher rate of interest, so they are always a better option than a traditional savings bank account. You can have a fixed deposit scheme for the definite goals in life, such as buying a new car, house or even funding the education of your children.

You can calculate the time between these milestones in your life and have an FD assigned for just that so that when the time comes, money would be the last thing that you would worry about. You can also make a detailed deposit plan using the fixed deposit calculator, which is available online.

Fixed deposits are also an excellent option for millennials who want a risk-free mode of investment since their income slab might not call for such high risk-taking. The fact that FD accounts are accessible online at the fingertips makes it much easier to work around them as you can track your savings online anytime and anywhere, and see how much interest you have accumulated on them over time.

Conclusion

Fixed deposits on Finserv MARKETS come with a host of features that make it a popular choice among individuals. Opening an account here is time-saving and hassle-free. All you have to do is feed in your basic details such as name and phone number, choose the FD plan and upload some documents to complete the KYC process, and finally make the payment to activate the plan. You can have a fixed deposit ranging from 12 months to 5 years on Finserv MARKETS.

You can be assured that your money is safe and performing well, as your deposits are guaranteed under the ICRA MAAA and CRISIL FAAA ratings. With interest rates going as high as 8.95 percent, you get the option to make the most out of your savings with much comfort, accessibility, and peace of mind.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522