How to Invest in Fixed Deposit Online

Fixed Deposits are one of the easiest ways of earning extra and a stable income. You just need to deposit your money for a certain amount of time and the interest will be paid after the completion of that period.

The Different Types of Fixed Deposits

1. Simple Fixed Deposits: The tenure for simple Fixed Deposits ranges between a week to 10 years.

2. Special fixed Deposits: The tenure for Special Fixed Deposits can be 300 days, 700 days or 1000 days.

3. Tax saving Fixed Deposits: With this type of Fixed Deposit accounts, you can save taxes under Section 80C though you still have to pay taxes on the interest amount. You are eligible for tax deductions upto a maximum amount of Rs.1,50,000 for 5 years.

The Advantages of Investing in a Fixed Deposit

1. You can earn a higher interest rate with a Fixed Deposit, compared to a savings account.

2. In case of any financial emergencies, you can always make use of the money in Fixed Deposits.

3. The duration of investment can be chosen by you, ranging from a month to ten years.

4. You can choose whether you want the interest to be paid annually or monthly. You can also withdraw this interest money for your use.

Taxes on Fixed Deposits

Many people invest in Fixed Deposits, happily earning an extra income. However, when it comes to tax payment, many either forget or neglect to consider this extra income. Such a mistake can lead you to getting a notice from the Tax Department.

The Fixed Deposit taxation is made according to the Income Tax Slab that you fall under. (The Income Tax Slab rates ranges from 0% to 30%.)Thus, the tax on Fixed Deposits varies from person to person, depending on the total income earned by that person in the year.

Tax Deducted on Source (TDS) on Fixed Deposits are deducted at the rate of 10% if the interest amount paid to you exceeds Rs.10,000 in a financial year. However, if you don’t have a PAN card, TDS will be deducted at the rate of 20%. The bank will automatically deduct this amount from the interest at the time of interest payment and deposit this amount with the Government.

This deducted amount will form a part of the total taxes that needs to be paid by you.

Furthermore, if you submit a declaration in Form 15G/15H for nil or lower deduction of TDS, lower rates as specified in these forms will be applicable to you.

How to Choose The Best Fixed Deposit Scheme

1. Choose a longer tenure for the Fixed Deposits. You can earn more interest in this way.

2. Invest in a bank that has high credit ratings. This will ensure you have the money in safe hands.

3. Check the premature withdrawal fee of the banks before investing in a Fixed Deposit.

4. Some banks provide additional benefits if you open a Fixed Deposit account in their name. You can avail loan facility on Fixed Deposits, in case of an emergency or you can also get insurances such as Personal Accident Cover as a free product.

Choose your investment as Fixed Deposit and earn assured returns on your investment. It is one of the safest options to invest money.

A Fixed Deposit can be best investment option for you, if you want a steady flow of income on your investment after a certain period of time. However, it is also important to consider it as part of your income while filing your tax returns.

 

[Swaswati Borpuzari]

Investing in a Fixed Deposit (FD) online can be a straightforward and efficient way to secure your financial future while earning a steady interest rate. To begin, you need to choose a reliable bank or financial institution that offers online FD services. Most banks have user-friendly websites or mobile applications where you can easily navigate through the FD options. Once you have selected a bank, create an online account if you haven't already. This typically involves providing your personal details, address, and PAN card number, and verifying your identity through a One-Time Password (OTP) sent to your registered mobile number or email address.

After setting up your account, you can explore the various FD schemes available. Consider factors such as the interest rate, tenure, and any additional benefits like tax savings or flexibility in deposit amounts. Once you have chosen a suitable FD plan, you can proceed to the application process. Here, you will need to fill out an online form with your personal and financial information. This includes the principal amount you wish to deposit, the tenure of the FD, and the interest payout preference—whether you want the interest to be compounded or paid out periodically.

Next, you can fund your FD by transferring money from your bank account. This can often be done through net banking, UPI, or other digital payment methods. Ensure that the transaction is completed successfully and that you receive a confirmation receipt. It's also wise to check your account to confirm that the FD has been credited.

Managing your FD online is equally convenient. You can track the status, maturity date, and interest accruals of your FD through the bank's digital platform. Additionally, many banks offer the option to prematurely withdraw your FD, although this may come with a penalty. If you are planning to reinvest the matured FD, you can typically do so online by setting up auto-renewal or by manually initiating a new FD after maturity.

Lastly, it's important to stay informed about the terms and conditions of your FD, including the tax implications and the possibility of changing your nomination details. Regularly reviewing your FD investments can help you make informed decisions and optimize your financial growth. By following these steps, you can invest in a Fixed Deposit online with confidence, ensuring a secure and potentially profitable financial future.