✅What is the minimum amount that can be deposited into a FD account?
You can deposit a minimum amount of Rs. 1,000 in FD account but there is no upper cap on deposit amount.
✅Are there any extra benefits for senior citizens on fixed deposit?
Yes, senior citizens get extra benefit of higher interest rates on their FD.
✅What is the minimum and maximum tenure for which I can open an account in FD?
You can open a fixed deposit account for minimum 7 days and maximum upto 10 years although it may vary bank to bank.
✅When do I become accountable for tax?
As per Income Tax Act, 1961 under section 194A when the interest earned on FD in a financial year exceeds Rs. 40,000, TDS is applicable on the credited interest.
✅How is a fixed deposit calculated?
The formula to calculate the maturity amount of a cumulative FD is:
A = P(1+r/4/100)^(4*n)
Here, 4 represents quarterly compounding;
it will be replaced by 12 in case of monthly compounding, by 2 in case of half-yearly compounding and by 1 in case of yearly compounding.
✅Is the interest earned on a bank Fds taxed? If yes, then how?
Yes, the interest on the bank fixed deposit is taxed. The interest is income is included in your total income while calculating income tax, and the tax is levied as per the applicable tax slab.
✅Is there a penalty if the bank fd is prematurely withdrawn?
Yes, if the bank FD is prematurely withdrawn, then a certain percentage of penalty on the final amount. The scale of the penalty varies from bank to bank.
✅How can I save tax on FD?
If your total income does not fall under any income tax slab, then you can submit Form 15G or 15H (for senior citizens) to stop the bank from deducting TDS on the interest income of your fixed deposit.
✅In how many years FD will double?
The interest rate on FD depends upon the tenure you choose. To know the time duration in which your FD amount will get doubled, you have to divide 72 with the highest rate. For example, if the highest rate on FD is 7.35%, then the number of years in which your FD will get doubled is 72/7.35= 9.80. Thus, it will take 10 years for your FD to get doubled. You can use an online FD calculator to strategize your investment.
✅What are the details required to use an FD Calculator?
You can use the FD calculator to calculate the maturity value of the deposited amount by details such as the principal amount that you have invested, rate of interest on your investments, tenure of deposits and interest compound frequency.