Fixed deposit: The biggest feature of FD is that it gives fixed returns along with safe investment. But, do you know that there are many other benefits of investing in FD as well.
Fixed deposit: Different options are looked for to save income tax. But, most of the people are looking for safe and good returns instrument. Therefore the safest option is Fixed Deposit. You can invest in it for tax saving. Tax exemption up to Rs 1.5 lakh is available on investment under section 80C of the Income Tax Act. The biggest feature of FD is that it gives assured returns along with safe investment. But, do you know that there are many other benefits of investing in FD as well. Let us know what are the 7 special features of your work?
1. Guarantee up to Rs.5 lakh
Fixed deposit is a safe investment, but if the bank sinks under any circumstances, then your money invested in FD in the form of government guarantee up to Rs 5 lakh will be safe. In case of bank default, you will get back up to Rs 5 lakh.
2. Health Insurance
HDFC Bank, ICICI Bank and DCB Bank are offering insurance with Fixed Deposit to the customers. Health insurance can also be available for free on making FD in these banks.
3. Advantages of Credit Card Against FD
Most banks offer credit cards against fixed deposits. Credit cards are available with a credit limit of 80-85% of the FD amount. People with low credit score or no credit history can take advantage of this offer. FD is used for the security of credit card expenses.
4. Withdrawal before maturity
Liquidity also comes with FDs. If needed, you can withdraw even before maturity. However, the bank may charge you some charges for doing so.
5. Tax Exemption
Tax saving benefits are available in FD. However, this benefit is not available on all fixed deposits. Income tax exemption is available on FD for 5 years. No tax has to be paid on the interest (FD interest rates) along with the deposit amount.
6. Loan Against FD
There is also the facility of loan against FD. The good thing is that the loan can be repaid according to your convenience. Loan can be availed up to 90% of the total value of FD. Loan against FD interest rate is 1-2% higher than the interest you get on your investment. This means that if you are getting 4% interest on FD, then you can get the loan at 6% interest.
7. Guaranteed Returns
Guaranteed returns are available in FD. At the very beginning of the investment, it is known that how much profit will be made in it on maturity.