There are two types of FD
Generally FD is of two types. The first is cumulative FD and the second is non-cumulative FD. There is interest on quarterly and annual basis. However, you can also avail interest at regular interval.
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>> Fixed deposits are considered the safest investment option.
>> There is no risk on the principal money deposited in it. In addition, you can also get returns in a fixed period.
>> The principal money invested in it is safe because FD has no direct effect on market fluctuations.
>> In this scheme, investors can avail interest on monthly basis.
>> Generally, the interest rate on FD is high. For senior citizens, it gives the highest returns.
>> One has to invest only once in any FD. If the investor has to make more deposits after this, then they will have to open a separate FD account.
>> FD has a maturity period, you have to deposit money for this year. But there is also an advantage that you can withdraw money before time if needed. However, if you break the FD before maturity, you lose interest, you have to pay some penalty on it. Which is different in different banks.
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What is the rule of tax deduction on FD
Tax is deducted from 0 to 30 percent on fixed deposits. It is deducted based on the income tax slab of the investor. If you earn more than Rs 10,000 in a year, you will have to pay 10 percent tax on your FD. However, for this, you have to submit a copy of your PAN card. If PAN card is not deposited, then 20% TDS is deducted on it. If the investor wants to avoid tax deduction, for this he should submit Form 15A to his bank. This applies to those who do not fall under any income tax slab. Senior citizens should submit Form 15H to avoid tax deduction.