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- Tax Savings FD Vs Post Office National Savings Certificate ; Investment Benefits And Interest Rates
New Delhi40 minutes ago
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Do not wait till the end of the financial year for tax planning. You should start investing for this from the beginning of the new financial year. If you want to save tax and invest in a place where your money is safe, then Tax Savings FD (5-year FD) and Post Office’s National Savings Certificate (NSC) scheme may be right for you.
The NSC scheme offers 7.7% annual interest along with tax exemption. The investment in the NSC scheme is also for 5 years. Here, apart from the National Savings Certificate Scheme of the Post Office, we are also telling you how much interest the major banks of the country are offering on 5-year tax saving FD.
Post Office National Savings Certificate
- Investment in Post Office National Savings Certificate (NSC) is giving 7.7% annual interest.
- In this, interest is calculated on an annual basis, but the interest amount is given only after the investment period.
- To open an NSC account, you have to invest a minimum of Rs 1000.
- This account can also be opened in the name of a minor or as a joint account in the name of 3 adults.
- Its maturity period is 5 years. You cannot exit the scheme before this.
- The amount deposited in National Savings Certificate is eligible for tax exemption under Section 80C of Income Tax.
- You can invest any amount in NSC. There is no maximum limit on investment in this. Click here for more information about this scheme
You get the benefit of tax exemption on 5 year FD
Tax saving FD matures in 5 years. By investing in it, you can claim a deduction of Rs 1.5 lakh from your total income under Section 80C of the Income Tax Act. In simple language, you can reduce your total taxable income by up to Rs 1.5 lakh through Section 80C.
Before investing money in FD, it is important to keep these 4 things in mind…
Do not invest all the money in a single FD
If you are planning to invest Rs 10 lakh in FDs in one bank, then instead invest in 9 FDs of Rs 1 lakh and 2 FDs of Rs 50,000 in more than one bank. This way, if you need money in between, you can arrange for money by breaking the FDs as per your need. Your remaining FDs will remain safe.
Withdrawal of Interest
Earlier the bank had the option to withdraw interest on quarterly and yearly basis, now in some banks you can also withdraw interest on monthly basis. You can choose it according to your need.
Also check the interest rate of loan available on FD
You can also take a loan on your FD. Under this, you can take a loan up to 90% of the value of the FD. Suppose the value of your FD is Rs 1.5 lakh, then you can get a loan of Rs 1 lakh 35 thousand. If you take a loan on FD, then you will have to pay 1-2% more interest than the interest received on fixed deposit. For example, suppose you are getting 6% interest on your FD, then you can get a loan at an interest rate of 7 to 8%.
Senior citizens get more interest
Most banks offer up to 0.50% more interest on FDs to senior citizens. In such a situation, if there is a senior citizen in your house, then you can earn more profit by getting an FD done in their name.
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