Busting some Myths about Fixed Deposits
Investing the extra funds that you may have acquired in Fixed deposits is always a good idea. The funds that you have acquired may have come from many possible sources such as inheritance, a bonus or some other investments that may have matured. That is because these funds won’t give you any profit if they lay idle somewhere in your savings account.
If you thought otherwise then you must know about some myths surrounding FDs. There are quite a few of them and you must clear all the doubts before you took a decision to invest your hard earned money.
- Myth 1: Only Banks offer Fixed Deposits.
This is probably the one of the most common myths surrounding FDs. Other than Banks there are many Non Banking Financial Companies who offer you the option of investing in FDs. In fact, they offer higher interest rates than banks. - Myth 2: Fixed Deposit Investments are Tax-Free.
Interest earned in FDs are very much taxable under ‘income from other sources’ when you pay your taxes. If the interest earned is equal to Rs. 10,000/- then you fall under tax bracket and your tax will be deducted at source.
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