HDFC Bank has increased the interest rates on fixed deposits (FD). This change has been made in the interest rates of FD less than Rs 2 crore. Now on making FD in HDFC Bank, common citizens will get interest ranging from 3% to 7.25%. Whereas senior citizens will get interest ranging from 3.50% to 7.75%.
Earlier, recently IndusInd Bank had changed the interest rates on Fixed Deposit (FD). On making FD in the bank, ordinary citizens are getting annual interest ranging from 3.50% to 7.75%. The bank is offering annual interest ranging from 4% to 8.25% to senior citizens. Changes in interest rates have been made on FDs of less than Rs 2 crore. The new rates have come into effect from February 6.
It is important to choose the right tenure
Before investing in FD, it is important to think about its tenure. This is because if investors withdraw before maturity, they will have to pay a penalty. If the FD is broken before it matures, a penalty of up to 1% will have to be paid. This may reduce the total interest earned on the deposit.
Do not invest all your money in one FD
If you are planning to invest Rs 10 lakh in FD in any one bank, then instead invest in 8 FDs of Rs 1 lakh each and 4 FDs of Rs 50 thousand each in more than one bank. With this, if you need money in between, you can arrange for the money by breaking the FD midway as per your need. The rest of your FD will remain safe.
Tax exemption is available on 5 year FD
5 year FD is called Tax Savings FD. By investing in this, you can claim a deduction of Rs 1.5 lakh from your total income under Section 80C of the Income Tax Act. Understand it in simple language, you can reduce up to Rs 1.5 lakh from your total taxable income through Section 80C.
