Monday, January 11, 2010

FD - Fixed Deposit

This is the third post of the series and covers FD.

1. What is FD?
  • FD stands for Fixed Deposits.
  • Any FD of 5 years or more can be used as Tax Saving instrument.
  • It can be open in any Scheduled Bank. List of scheduled banks can be found at: ThankPlainInvest
  • If FD is in joint name, only primary holder of the policy can avail the tax exemption.

    2. What is interest rate of FD?
    Interest rate for FD varies from bank to bank.

    3. What is the lock in Period?
    Lock in period is 5 years.

    4. How to get the money back?
    After lock in period money can be refunded back to main account. Interest can be taken either quarterly or reinvested.

    5. Is interest accrued on savings is Taxed?
    Yes, interest accrued is Taxable.

    Further Reading:

    1. You can get FDs that are shorter in duration can't you? Like for one year or so.

    2. Here we are talking about Tax saving instruments. surely we can get general FDs of shorter periods, anywhere starting from 15 days.