7 Fixed Deposit Variants Every Indian Should Know
Fixed deposits (FDs) are a popular way to safely grow savings. By locking in a lump sum for a set period, investors can earn guaranteed returns without market risks. However, the variety of FD options can be overwhelming. Here's a breakdown of seven types of FDs you can consider for your financial goals.
1. Regular Fixed Deposits
A regular FD is a basic investment option for those looking for a safe and steady return on their savings. With a fixed interest rate, investors can choose a deposit tenure ranging from a few months to several years. Depending on the terms, interest may be paid monthly, quarterly, or annually, offering flexibility for individuals. The key advantage is the certainty of returns, making it ideal for risk-averse individuals seeking consistent growth in their savings.
2. Tax Saver Fixed Deposits
Tax saver FDs come with dual benefits: earning interest and saving on taxes. Under Section 80C of the Income Tax Act, you can invest up to ₹1.5 lakh annually to reduce taxable income. However, these FDs have a lock-in period of five years, which means no premature withdrawal is allowed. Though the interest is taxable, the fixed returns and tax benefit make it attractive for long-term savings.
1. Regular Fixed Deposits
A regular FD is a basic investment option for those looking for a safe and steady return on their savings. With a fixed interest rate, investors can choose a deposit tenure ranging from a few months to several years. Depending on the terms, interest may be paid monthly, quarterly, or annually, offering flexibility for individuals. The key advantage is the certainty of returns, making it ideal for risk-averse individuals seeking consistent growth in their savings.
2. Tax Saver Fixed Deposits
Tax saver FDs come with dual benefits: earning interest and saving on taxes. Under Section 80C of the Income Tax Act, you can invest up to ₹1.5 lakh annually to reduce taxable income. However, these FDs have a lock-in period of five years, which means no premature withdrawal is allowed. Though the interest is taxable, the fixed returns and tax benefit make it attractive for long-term savings.
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