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Investing in Fixed Deposits (FD) is considered one of the best investment options for people who are looking for good stable returns without exposing themselves to volatile market risk. FDs are offer better return than any saving accounts but this benefits of keeping your money in FD goes beyond the good return rate.FD investments come with many benefits that include insurance and healthcare, and in the case of FDs for at least 5 years, the investor is also entitled to exemption in income tax.
As per experts, FD investments are a smart choice especially during volatile times like this.Here are 5 benefits of FD that make it a good investment option beyond just the good return on money.
Overdraft Facility: Bank customers are eligible for overdraft facility against their FD. The facility can be used by customers to meet their sudden cash demands in case of any emergency.
Tax Exemption: Investment in FDs also come with tax exemption benefits. For investment made in FDs under tax saving schemes, customers are allowed to claim tax exemption under Section 80C of the Income Tax Act, 1961.
Assured Return: FDs come with potentially no risk to your investment and the returns do not fluctuate unlike the other investment tools in the market. For beginners, investment in FDs can help to develop an investment habit as they can invest in bank FD with even smaller amounts for a short duration like 15 days to 3 months.
Insurance and Healthcare: To attract customers to invest in FDs, many banks are also offering free insurance policies and other health care benefits along with their investment schemes
Ease of Managing FD investment: With the arrival of the internet, managing your banking became easier for customers. Now, they can manage their money through a phone, or a laptop connected to the internet. Unlike earlier, opening an FD account and investing money does not require a lengthy formal process and bank customers can use net banking to make investments in GD within few minutes.
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About the Author
As an enthusiast with a deep understanding of financial instruments and investment strategies, let me delve into the concepts outlined in the article about Fixed Deposits (FDs) dated July 25, 2021.
1. Fixed Deposits (FDs) as an Investment Option:
- FDs are considered a secure investment avenue for individuals seeking stable returns without exposing themselves to market volatility. This aligns with the common understanding that FDs offer a reliable way to preserve and grow one's capital.
2. Benefits Beyond Returns:
- The article emphasizes that FDs provide benefits beyond the attractive return rates compared to regular savings accounts. This suggests a nuanced understanding of the multifaceted advantages associated with FD investments.
3. Exemption in Income Tax:
- One notable advantage highlighted in the article is the exemption in income tax for FDs held for at least 5 years. This is a tax-saving strategy falling under Section 80C of the Income Tax Act, 1961, demonstrating a comprehensive grasp of the tax implications of FD investments.
4. Overdraft Facility:
- The mention of an overdraft facility against FDs underscores a practical application of FDs. This feature allows customers to meet sudden cash demands during emergencies, showcasing the versatility of FDs as a financial tool.
5. Assured Return and Risk Management:
- The assurance of returns without the fluctuations associated with other investment tools indicates a clear understanding of risk management. This is crucial for investors, especially beginners, who may prioritize stability and predictability in their investment portfolio.
6. Insurance and Healthcare Benefits:
- The article introduces an interesting aspect where banks offer free insurance policies and healthcare benefits to attract FD investors. This demonstrates an awareness of the additional perks that financial institutions may provide to make FDs more appealing.
7. Ease of Managing FD Investments:
- The integration of technology, specifically the mention of managing FDs through the internet and net banking, reflects an understanding of the evolving landscape of banking. This ease of use is presented as a valuable aspect, addressing the changing preferences and habits of modern investors.
In conclusion, the article curated by the Business Desk reveals a comprehensive grasp of the intricacies associated with FD investments, showcasing an awareness of not only the financial aspects but also the practical benefits and evolving trends in the banking sector.
