Published on September 28, 2021
Mumbai : Though you can open a fixed deposit (FD) account for a tenure ranging from 1 year to 10 years, the 5-year deposit is a special one owing to its tax-saving feature. Yes, your money gets locked in till the time of maturity, but the many benefits of this FD scheme make it a profitable investment option.
So, if you’re planning to invest in a fixed deposit, make sure you stay invested for five years, at the least. This guide will help you plan your five-year FD.
A tax-saving 5-years fixed deposit will function like any other FD account where you invest a lump sum for a fixed tenure (in this case, five years). Throughout the tenure, your money remains safe, earning interest at a pre-specified rate. Even if market conditions deteriorate, your investment doesn’t suffer and continues earning a steady rate of interest. However, you will not be able to withdraw your money before the time of maturity without attracting a penalty.
Before you choose any investment option, the three important factors to consider are your age, investment horizon, and the level of risk involved. Considering these three factors, a tax-saving FD is suitable for you if –
Opening a five-year fixed deposit is risk-free and easy. You can easily open one online. Scour through different banks’ offerings to compare interest rates and other FD features.
Do remember to use an online FD calculator by IndusInd bank to see how much your invested amount will grow to. A five-year FD is the path of disciplined investing that eventually leads to assured returns and tax savings. So, why would you wait? Start growing your money today!
by Sachin Murdeshwar