FD Tips: Apart from interest, these 5 big benefits are available in FD, most of the people are not aware of this...

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Everyone wants to increase their earnings and in such a situation investors look for low risk and high return options for investment. If you are also looking for a similar option then this news is useful for you. Actually, when it comes to investment, most people talk about FD (Fixed Deposit). FD is given importance because there you get guaranteed returns. Many people also advise investing money in mutual funds or other places instead of getting FD.


This is so that higher returns can be earned. At other places, returns are not guaranteed. So if you want guaranteed returns on your money then FD is a better option. Not only this, there are many benefits of FD (Benefits of Fixed Deposit). So while making an FD, do not just look at the interest received on it (FD Rate), but also keep other things in mind.

1- Loan or overdraft facility on FD
Many people do not know that they can easily get a loan from the bank against the FD they make. Some banks also provide overdraft facilities on that basis. FD is like a guarantee that if you are unable to repay the loan, the loan amount will be covered by your FD. So now if you compare FD with any other investment, then also keep in mind that you can get a loan against FD.

2- Insurance cover is available on FD
If you have an FD in the bank, then you get the insurance coverage of Deposit Insurance and Credit Guarantee Corporation (DICGC) on it. If your bank defaults or goes bankrupt, you will get up to Rs 5 lakh under this insurance cover, which will include both principal and interest. That means, not only will your returns be guaranteed, but you will also be guaranteed to get back up to Rs 5 lakh.

3- Benefit of free life insurance
There are many such banks, that give an additional benefit of free life insurance to those who make FD with them. Banks give such offers so that they can attract more and more people to FD. Under this, banks offer life insurance equal to the fixed deposit (FD) amount to their customers. However, there is also an age limit to this. If seen, banks calculate their risk and provide life insurance to their customers, which is a profitable deal.

4- Tax related benefits
If you make a fixed deposit (Fixed Deposit Interest Rate) for 5 years or more, then you can claim tax exemption on it under Section 80C of the Income Tax Act 1961. Under this, you can get tax exemption up to Rs 1.5 lakh in a year. However, if you make an FD for less than 5 years, you will have to pay tax. If the interest received from various banks in a year exceeds Rs 40 thousand, then tax will be levied on that also.


5- Guaranteed returns
The most special thing about FD is that you get guaranteed returns on it. That means, if you are planning for 5 years or 10 years or any number of years, then in FD you know for sure how much money you will get on maturity. This is because fixed returns are available on FD. At the same time, returns in investments like mutual funds, NPS, and ELLS fluctuate every year and depend on the movement of the stock market.

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