Fixed deposits best investment or not| With Automatic Income Tax Form 16 Preparation Excel Based Software for the F.Y.2022-23

  Fixed deposits best investment or not | Fixed deposits basically mean depositing a certain amount for a

 fixed period. You can earn cumulative interest on the principal over the term. The interest earned is

 added to the principal after each specified interval. At the end of the financial year, the investor earns

 simple interest of up to 6%. Seniors are eligible for an additional benefit, usually 0.25% to 0.65% over

 the existing rate.

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Where to open an FD account You can open a term account with a bank where you already have a savings account. Apart from this, there are many banks that will allow you to open an FD account even if you do not have a savings account with them after the KYC process which requires you to provide relevant documents including ID proof, address proof, and passport-size photos among others.

 

Types of Fixed Deposit Accounts

There are different types of fixed deposits depending on the objectives behind them

Download and prepare at a time 50 Employees Form 16 Part B for the F.Y.2022-23 in Excel

 

1. Standard Fixed Deposits: It is a standard FD scheme that can be found in all banks where a certain amount is deposited for a fixed period and the interest rate is predetermined by the bank. The tenure of these deposits can range from 7 days to 10 years and the interest rates are higher than that of a savings account

 

2. Tax Saving Fixed Deposits: This type of deposit plays an important role in tax saving where you can claim tax exemption up to Rs. 1.5 lakh per annum These FDs have a lock-in period of 5 years which you cannot withdraw the amount and only one-time deposits are allowed in these types of fixed deposits.

Download and prepare at a time 100 Employees Form 16 Part A&B for the F.Y.2022-23 in Excel

 

3. Special Fixed Deposits: These are just like standard FDs where money is deposited for specific periods of time. The only difference is that if you do not withdraw the money within the stipulated period, you earn more interest on it than standard FDs.

 

4. Fixed Deposits for Senior Citizens: The Fixed Deposits Scheme for Senior Citizens provides benefits to citizens above the age of 60. These FD schemes offer an additional interest rate of about 0.50% over interest rates regular with flexible tenures

Download and prepare at a time 100 Employees Form 16 Part B for the F.Y.2022-23 in Excel

 

5. Flexi Fixed Deposit: These are the types of FDs that are linked to your savings account where you can start with an initial deposit of your choice and have it linked to your savings account.

 

Advantages of fixed deposits

Guaranteed Return Fixed Deposit: Accounts (FDs) are relatively risk-free compared to other forms of investment because investors earn a fixed rate of interest on the amount invested.

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High-Interest Fixed Deposit: These deposit schemes offer relatively higher interest rates than other traditional investments, such as savings accounts and recurring deposits. 

The tax benefit 

Fixed deposits can also offer tax benefits up to Rs.1.5 Lakhs under Section 80C of the Income Tax Act 1961.

Download and prepare One by One Form 16 Part A&B and Part B for the F.Y.2022-23 in Excel