Question: What Is The Best Alternative To Fixed Deposits?

Is FD a good investment option?

Fixed Deposits As one of the most traditional and safest means to invest, many prefer it for wealth creation and saving taxes.

Yes, it is eligible for tax deduction under 80C.

They also offer high-interest rates as compared to savings accounts.

You can open an FD account with almost all the banks in India..

Which scheme gives highest rate of interest?

Two major savings schemes cater specifically to senior citizens, those individuals who are aged 60 or above. These schemes – Senior Citizens Savings Scheme (SCSS) and Pradhan Mantri Vaya Vandana Yojana (PMVVY) offer higher rates of interest than prevailing FD rates.

What is the interest of 1 lakh in post office?

SynopsisInstrumentInterest rate (%) from 01.10.2020Max amt (Rs)Time Deposit#5.50-6.70No limitPost Office Monthly Income Scheme6.60Single: 4.50 lakhPost Office Monthly Income Scheme6.60Joint: 9 lakhKisan Vikas Patra6.90No limit6 more rows•Oct 8, 2020

What is the interest of 1 lakh in SBI?

Interest rate on SBI savings bank deposits Currently, the interest rate on savings bank deposits on balance up to Rs 1 lakh is 3.5 per cent. On balance above Rs 1 lakh, the interest rate is 3 per cent per annum, which is set at 2.75 per cent below RBI’s Repo Rate, with a minimum of 3 per cent for the entire balance.

Can I double my money in 5 years?

The Rule of 72 shows you how quickly you’ll double your money. All you have to do is divide 72 by the interest rate it’s earning. This is the number of years it will take for your money to double. … Or, if your money is earning a 5 percent interest rate, you’ll double it in 14.4 years (72 divided by 5 equals 14.4).

Which is better FD or liquid fund?

Liquid fund investors are considered to be in a better position than fixed deposit holders in case of taxation on their respective investments. When it comes to tax on liquid funds, the investors are entitled to avail tax indexation, which directly helps them to lower their burden of tax-related expenses.

Why you should not invest in fixed deposit?

Inflation risk: FD returns at times can be around the same as inflation or even lower than inflation rates leading to wealth erosion for the investor. 4. Interest rate risk: Bank FDs carry the risk of being locked in for a long tenure at low rate of return.

Which bank is highest interest?

Fixed Deposit Interest Rates by Different BanksBankTenureInterest rateICICI Bank7 days to 10 years4% to 7.25%Punjab National Bank7 days to 10 years5.70% to 6.85%HDFC Bank7 days to 10 years3.5% to 7.40%Axis Bank7 days to 10 years3.5% to 7.25%2 more rows

Is fixed deposit guaranteed?

Your investment in a bank is insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, which covers your deposits up to Rs. 1 lakh for both principal and interest amount held in the same capacity and same right. So, even if the bank you have an FD in goes insolvent, your money would be safe.

What is better option than FD?

A fixed deposit is a low-risk, low-return investment option ideal for highly conservative and risk-averse investors. If you are willing to take some degree of risk there are several better alternatives such as Liquid Mutual Funds, Debt Mutual Funds etc.

How can I get maximum return from fixed deposit?

Try and apply for cumulative deposits, as they tend to compound interest. Banks compound interest every quarter, while company Fds do not. The law of compounding will ensure higher yields in the future. Some companies like KTDFC compound interest every month, so your yields tend to be very high.

Where should I put money now?

Here are a few of the best short-term investments to consider that still offer you some return.Savings accounts. … Short-term corporate bond funds. … Short-term US government bond funds. … Money market accounts. … Certificates of deposit. … Cash management accounts. … Treasurys.

What are the disadvantages of fixed deposit?

Below are three disadvantages of investing in fixed deposits:No flexibility to access your funds. Because your money is locked away with the bank, often for months (sometimes years), you lose the flexibility of a regular, day-to-day savings account. … Relatively low investment returns. … It is not sexy.

Which bank is best for fixed deposit in 2020?

DBS. BEST FOR. Low minimum deposit. INTEREST RATES. … Maybank. BEST FOR. Promotions for online deposits. INTEREST RATES. … ICBC. BEST FOR. Short tenure. INTEREST RATES. … Hong Leong. BEST FOR. Considerate and fair conditions. INTEREST RATES. … CIMB. BEST FOR. Same interest rates for 3 months up to 1 year. INTEREST RATES.

Which is better Bank FD or Post Office FD?

Post office time deposits The interest earned is fully taxable and to be added to one’s ‘Income from other sources’ as in the case of bank FD. There is complete safety as the entire amount in post office time deposit is backed by a government guarantee. Even the interest rate is higher than bank FD in most cases.

Can you lose money in fixed deposit?

Interest rate risk When you put money in an FD, the rate of interest is guaranteed. … You effectively end up losing money in your old FD because you lost that higher-returning opportunity. You’re however comforted by the fact that rates are higher and that you’d be able to get that higher rate when your deposit matures.