Tax Relief in India
In India, there are different types of tax relief available, with some tax saving schemes more beneficial than others. For instance, Section 80C tax exemption is available for individuals with a yearly income of less than Rs 2.5 lakh. You can apply online for this exemption and receive a tax exemption certificate that you can show to financial institutions to receive free loans or other financial benefits. A company can also take advantage of Section 80C tax relief if it has a yearly income of less than Rs 50 crores.
FD interest rate 9% vs 9%
The recent increase in the interest rate on FDs has made them attractive again. FD rates were low for a long time. In August 2022, inflation was at 7 per cent, due to rising crude oil prices and supply constraints. Now, it is possible that rates could reach 9% in the near future.
This rate hike is likely to continue for some time, as banks are under pressure from the RBI to raise rates. FD investors should keep these developments in mind as they invest. It will take some time for depositors to see the full benefit of higher rates. Therefore, consumers should stick to a one to two-year tenure when they plan to park their surplus in FDs.
Fixed deposit interest rates depend on the repo rate set by the RBI. If the repo rate is low, the interest rate on FDs will be low too. At present, the repo rate is around 4.4%. The difference between FD interest rate 9% vs. 9% is small but significant. It is important to remember that interest rates fluctuate frequently.
If you are looking for an FD, compare the interest rates offered by different banks. Some banks offer higher interest rates than others, so make sure to compare the rates before you choose an FD. If the interest rate on a particular bank is too high for your needs, consider a smaller finance bank.
If you have a longer time horizon, you should consider getting a longer term fixed deposit. FDs with a longer maturity period will earn you more money. For example, a three-year FD from Utkarsh Small Finance Bank will give you an 8.35 percent interest rate.
Fixed deposits are a popular form of savings. They are safer than mutual funds and are considered to be more secure. Some banks offer higher interest rates than mutual funds. Small finance banks can offer 9% FDs for select maturities. It is important to select the right compounding period when choosing an FD.
A conservative bank will usually offer a higher rate on an FD. FDs with five years’ duration will fetch rates between 8% and 9%. When the repo rate rises to 6.5%, conservative banks will raise their rates to 8% or more. In some cases, a conservative bank may also offer a special rate of 8.5% for senior citizens.