Financial planning is of utmost importance today and all individuals need to invest their savings to address emergencies and also ensure comfortable future living. To support the same, banking sectors were introduced in the Indian scenario in early 1800s which were targeted towards the welfare of commoners.

Banks were initially assigned the job of securing funds and other valuables of their potential customers which gradually gained prominence with time and is now considered one of the most profitable sectors in global market. Later on, banks expanded their services and launched several financial instruments whereby, customers could invest their hard-earned money and earn significant returns as per the interest rate levied on each scheme. Fixed deposits (FD) are by far the oldest and still the most popular investment scheme offered by all Indian banks. It is the simplest financial tool whereby an applicant can deposit a fixed sum of money over a fixed tenure (say 1, 2 or 5 years – the maturity period) and offers a fixed interest rate which is higher as compared to the standard savings bank account. FDs are completely safe investment tools where customers can enhance their funds and involve minimum risk unlike stock trading.

Nowadays, with easy and uninterrupted internet access, banking and monetary transactions have become simpler and more accessible for the masses. Internet/Mobile banking facility has promoted customers to perform various banking transactions via smart phone facility. Such facilities have the open FD online services, where FD can be opened anytime, anywhere, be it at home or while on the run. We can now completely do away with the hassles of physical presence or rushing to the bank premises during office hours to avail banking services. In fact, using a mobile web service, it is possible to open up a FD online while on the go. The FD interest rates can vary depending on the terms laid by the bank offering the service and also the tenure of deposit. So, before investing, customers should avail the FD interest calculator service, which is an online tool that accepts the deposit amount, tenure of deposit and the deposit type as input parameters and generates the final maturity value as output (interest rate here is a constant factor). This service imparts a clear picture of the prospective monetary gain and hence the applicant can judiciously select the parameters prior to investing in FDs to ensure substantial return on maturity.

Some banks offer specialized FDs known as tax saver FD. It is beneficial for tax related purposes since for standard FDs, the deposit amount and the return earned are fully taxable under TDS (Tax Deducted at Source) as per the Income tax Act, 1961.The tax saver FDs whereas have a higher tenure, mostly 3 to 5 years and cannot be terminated prematurely unless under conditions of untimely demise of the account holder. The owner of a tax saver FD can claim for tax exemption under Section 80C of the Income Tax Act, however, the interest gained on such deposits are taxable.

Mobile/Internet banking also brings a host of benefits related to FDs for all customers. The minimum deposit amount required to open an FD account is Rs.5000/-from mobile banking and Rs.10000/- from branch. Also, a minimum fixed tenure of an FD can be chosen to be 7 days only to enjoy short-term investment benefits. Instant transfer of funds to a FD account from an existing savings bank account is also facilitated from internet banking facility or via the bank’s mobile app.

This ensures best possible offers and benefits for customers opting for a FD account to grow assets securely and in the steadiest manner. Online tools like the banking mobile app, internet banking facility and online FD interest calculators have made it exceedingly simpler for customers residing both in urban location and suburbs to invest in FDs at large.

By Chakraborty

Dr Chakrabarty is the Chief Innovation Officer of IntuiComp TeraScience. Earlier she was Assistant Professor of Delhi University, a QS ranked university in India. Before that she has held research positions in IIT Mumbai, IIT Chennai and IISc Bangalore. She holds 2 patents and over 20 research publications in her name which are highly cited. Her area of research is in smart technologies, integrated devices and communications. She also has a penchant for blogging and is an editor of Business Fundas.

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