High Returns Guaranteed on Fixed Deposit Schemes in 2020

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According to a recent report of Trading Economics, the year-on-year growth of deposits in India stood at 9.5% in January 17th 2020. The constantly growing economy with numerous domestic and foreign deposits has helped shape up the future of the Indian financial market and created beneficial opportunities for investors.

Now, customers can receive higher returns with a fixed deposit in India in addition to assured returns by making sure they adhere to a few pointers.

How to avail higher returns on FD in 2020?

  • Invest after thorough research

Customers invest their saved funds in a plan to acquire substantial returns after the term and hence they should research thoroughly before investing in one. With several government-backed and private financial institutions offering fixed deposit schemes, deciding which one to invest in is a tough ask.

Consequently, individuals should check the security, ease of deposit, and higher interest rate aspects into consideration before investing in one. With thorough research of the investment plan, availing higher returns will be easier.

  • Choose a long tenor when receiving a higher rate of interest

The tenor of FD affects its interest rate as for longer tenors, financial companies tend to give higher interest. In case customers are offered an interest rate which is comparatively high and can bring more returns, opting for a long lock-in period is likely to benefit them.

This is beneficial as the returns are assured in case of FD, and any changes in market-rate won’t have any impact over the maturity amount of term deposit.

Senior citizen fixed deposit interest rates are higher than rates offered to a normal citizen. Hence, individuals attaining the age of 60 will receive more returns from the investment. Moreover, individuals saving funds for their old age parents can benefit the most if the FD account is opened in their name.

  • Use FD calculators online

Choosing the best investment plan may be challenging, and investors are often found struggling in such cases. To help customers in the same, financial companies provide tools like a fixed deposit calculator.

Customers first need to choose the type of deposit account, input the investment amount and tenor to see the offered rate of interest and compute interest pay-out and maturity returns. This helps with ease in the calculation and saves them from the trouble of enquiring from each financial company.

By calculating the returns, one can easily invest in a beneficial fixed deposit account that promises substantial returns. NBFCs like Bajaj Finance offers returns up to 8.35% on investment with FDs.

  • Save TDS by splitting for different tenors

For interest earned above Rs.40,000 in a year, individuals are entitled to tax deduction at source at a rate of 10%. Therefore, investors can save on TDS either by creating multiple accounts with different tenors or by opening a fixed deposit in India account in the name of their spouse, children, or parent’s name.

  • Fill up Form 15G or 15H for tax exemption

According to the Income Tax Act, for every individual (with taxable or non-taxable income) who earns interest above Rs.40,000, financial companies deduct tax and pay directly to the Income-tax department.

In case the individual belongs to a non-taxable income category, they will be able to receive exemptions by filling Form 15G or 15H (for senior citizens). Individuals with taxable income should also fill Form 15G so that they don’t have to pay taxes twice for the same investment. These are some benefits of Form 15G/15H, which helps investors receive higher returns.

Customers investing in fixed deposit in India, that not necessarily rely on periodic interest pay-out, to pay their monthly bills can choose to opt for a cumulative type of account.

Besides, features like auto-renewal work in favour of the investor as the interest applied aren’t halted even for a day. Individuals can make sure to receive multiplied and guaranteed returns by adhering to these techniques. These will not only help customers investing in the right place but will ensure they manage it wisely to maximise returns.