Have you also done FD in the bank then this news is for you, you will benefit from taking care of these things

Fixed deposit is the most preferred option among all types of savings schemes . This type of saving is loved by all types of people. The biggest reason is that it is safer and less risky compared to other schemes. It can range from small investments to long term investments. Today we are going to give you a lot of information including rules, taxes associated with FD. With that in mind you can easily take advantage of this savings scheme.

There are two types of FD

There are usually 2 types of FDs. The first is cumulative FD and the second is non-cumulative FD. It earns interest on a quarterly and annual basis. However, you can also avail interest on regular intervals.

The benefits of investing in FDs

• FD is considered to be one of the safest investment options.
• There is no risk on the principal deposited in it, plus you get a return at a fixed time.
• The principal invested in it is safe because FDs are not directly affected by fluctuations in interest.
• Investing in this scheme can avail interest on a monthly basis.
• The interest rate on FDs is usually higher. This is the highest return for senior citizens.
• One has to invest once in any FD. If the investor has to deposit more after that, they have to open a separate FD account.
• FDs have a maturity period. You have to deposit money for so many years. But the advantage is that you can withdraw money early if needed. However, breaking the FD before maturity costs you interest. On which some penalty also has to be given. Which vary in different banks.

What is the rule of tax deduction on FD?

Interest is deducted from 0 to 30% on fixed deposit. This tax is deducted on the basis of the investor's income tax slab. If you earn more than Rs 10,000 in a year, you will have to pay 10% tax on your FD. However, for that you have to submit a copy of your pen card. If the pen card is not deposited, 20% TDS is deducted on it. If the investor wants to avoid tax then he should submit Form 15A of his bank. This applies to those people. Which does not fall into any income tax slab. Senior citizen should submit Form 15H to avoid tax deduction.