What is the FD account? What are the benefits and how to open it

What is the FD account?

It is an account providing interest in the amount you have deposited up to a certain date and a fixed interest rate. In FD Account, you have to deposit the amount for a certain time, and you get more interest than any Saving Account. But you can never withdraw money like Saving Account, if an emergency, you can withdraw the FD prematurely, but that is also your own conditions. A fixed deposit is an easiest and most useful way to protect your money, where you can keep the money safe and earn high interest from it.

Benefits of FD account:

Now you know what a fixed deposit is. It's quite different from a savings account, and you can open your FD and take a lot of benefits.
High interest (6%-8%) higher interest than any savings account in FD you get it.
It's effortless and safe; you can get your FD by visiting any bank or post office.
You can also get tax relief within the FD, which will give you tax exemption under 80C. But for that, you have to choose fDs that have a period of more than 5 years. Although TDS is also deducted after an amount, it also has some rules.
As far as the FD is going to be paid, you can withdraw the fixed deposit before you get the money, but it also has the bank's conditions as to how much interest you will now get on the premature FD.
Also, if you want to keep the FD running after a certain period of time, you can also easily renew the FD.

Fixed Deposit Interest Rate:

When it comes to interest rates, you will find a number of banks on FD that offer interest from 6% to 9%. Earlier, this interest rate was high, but there have been many changes in view of inflation and the economy in today's date. In each bank, you will get the FD interest rate differential, and there are some banks that are giving freedom to open FDs at a very good rate. Normally, if your fixed deposit interest rate is between 6%-7%, it will take 10 to 12 years to double your money, and if the rate is between 8% and 9%, it will take between 8 to 9 years.

How to calculate FD Amount:

If you want to know how long your money will double with your FD's fixed interest rate.

Difference between FD and Mutual Funds:

FD:

If your plan short term has to securely keep your money in a place where you get a proper return for the next few years, I'd say you should open an FD for yourself. Because it's completely secure, you get a fixed rate of interest, and you can also withdraw money from it in Emergency.

Mutual Funds:

But if your plan is long-term and you want to get more return than FD, you can invest in Mutual Funds under SIP. Yes, it's a little risky, but if you make a longterm investment in it with the right guidance, it gives you an outstanding return in the future.

Tax on Fixed Deposit:

If you get an FD for more than 5 years, you will get tax relief under 80C. Many banks facilitate the opening of fixed deposits with a tax benefit. You get income tax exemption under section 80C on the amount invested in it, but also deduct TDS on your FC account. After a certain amount, the bank automatically deducts the TDS from your FC account and maintains the remaining amount.

Where and how to open FD account:

Today, there are not only banks but many other financial companies that offer an FD facility for you. You can also open FD in any of your digital banks, financial company, or post office. You can open your FD Account in two ways online and offline.

To get a fixed deposit, you need to do the following:

How to open an offline FD account:

Get all the FD information in your nearest bank, such as interest rate, maturity period, minimum amount, premature FD breaking conditions, and all information about Tax – TDS, etc. After that, you need to submit all the information with the FD Form with all the necessary documents, after which your FD Account will open.

How to open an online account:

You must have a net banking facility. After which you need to login to it and fill in the FD Form. Then submit all the documents with an online form. You can auto-sweep your Normal account so that you will automatically deposit money into the FD account on time.

Documents required to open FD: