Types of Fixed Deposits: From Standard FD to Tax Saving, Flexi, Callable, Non-callable FDs explained
Fixed Deposits are one of those investment instruments that are not only risk-free but come with assured returns. Fixed deposits offer a return between 3 to 9 per cent depending on the tenure and interest rate being offered by the bank. Since the interest rates for FDs are pre-defined, you get the return as per the rate when the investment was made. So, it gives guaranteed returns. However, to make most of your investment into fixed deposits, you must choose wisely from several types of fixed deposits available in the market.
Types of Fixed Deposits: Standard FDs
As the name suggests, the Standard Fixed Deposit is the basic type of FD where you park your money for a fixed term ranging from 7 days to 10 years. The interest rates are pre-defined and are higher than the regular savings account. You can also get loan and overdraft facilities against the standard FDs. (Pixabay photo)
Types of Fixed Deposits: Tax-Saving FDs
The tax-saving fixed deposits come with a lock-in period. This means, it cannot be withdrawn before that tenure. Also, loan and overdraft facilities are not available against tax-saving FDs. This is for those people who wish to claim tax exemptions of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. (Pixabay photo)