What to know before you invest..


Today we are to talk about a few things which we must know before we invest our hard earned money. To start up with. Let’s discuss about FIXED DEPOSITS today. Fixed deposits are something which every investor during their investment life must have invested in. It being the easiest and the safest investment options is more preferrable over other schemes. What all you need to have a fixed deposit is, a principle amount and a bank nearby. Fixed deposits are a kind of lumpsum deposit you make with babks for a fixed tenure on which you receive a pre-defined rate of interest. Suppose you have invested rs. 10000 in FD scheme at 10% interest rate for 5 years. On maturity you’ll be getting rs. 16,386 on maturity. You all must be having a figure of around rs. 16,105 after calculating cummulative interest on rs. 10000 for 5 years at 10% rate. You all are correct but actually banks compound interests every quarter thus handing you over with rs. 16,386 on maturity. So at the end of the day you are getting an interestvrate of 10.38% per annum. You can open up a fixed deposit for different duartions varying ranging from 7 days to 10 years. And your investment could range from as little as rs. 100 to unlimited amount with some banks. Be cautious while investing, as different banks offer different interest rates. And the interest rates will also vary with the duration you want to invest in. You get income tax benefit on investing in 5year FD. Given your prior notice to the bank. Suppose your annual income for the current year is rs. 500000 and you invested a sum of 200000 under the 5 year FD scheme. Then you get a deduction of rs. 1.5 lakh from your income under section 80C of incomr tax law. So finally you end up paying income tax for rs. 3.5 lakh only. It’s pretty simple and rewarding to invest in fixed deposit schemes. Check out with the baks available with the facility and invest your money. Wise investments are the key to financial freedom. Stay updated play wise.