Fixed Deposit Double Scheme Yojana

Are you interested in saving money? You can achieve this financial goal by investing your money in the Fixed Deposit Double Scheme Yojana. The Fixed Deposit Double Scheme Yojana brought to you by the Government of India allows you to double your money in an efficient manner. There are many investment options available in the market that promise to double your funds. However, most of these options may not be genuine. When you go for the Fixed Deposit Double Scheme, you can be assured that your money will get doubled without having to worry about any risks or losses.

Meaning of Fixed Deposit Double Scheme

A Fixed Deposit Double Scheme that enables customers to double their funds within a certain period. This scheme is available in very few banks in India. According to the terms of this financial scheme, you will need to deposit a particular sum of money for a certain period which will be fixed. This money will yield some interest and this particular interest will help in doubling your money. You will receive the doubled money after the term of your deposit expires.

Features and benefits of a Fixed Deposit Double Scheme

Let us now take a look at the common features and advantages of a Fixed Deposit Double Scheme:

• Quick and simple to open: You can open a Fixed Deposit Double Scheme in your account quickly without much trouble. The documentation for this deposit scheme is simple.
• Minimum amount requirement: There is a minimum amount requirement for investing in the Fixed Deposit Double Scheme Yojana. The minimum amount will be different for each bank.
• Different interest for customers: Each category of customers such as senior citizens, etc. will have different interest rates. These interest rates will help in doubling the funds of the customers.
• Early withdrawal of money: With this type of scheme, you can withdraw money from your account before the due date. This scheme is flexible in nature. When you have medical or personal emergencies, you can withdraw from your account without any worries.
• Nomination: Individuals who have deposited in Fixed Deposit Double Scheme can nominate others in case of emergencies or demise.
• TDS benefits: You will be entitled to tax benefits under this scheme. When you gain interests from this deposit, you can enjoy TDS deductions.
• Loans: With a Fixed Deposit Double Scheme, you can apply for loans from your bank. With this, you do not have to worry about lengthy documentation processes.

Banks that give Fixed Deposit Double Scheme in India

These are some of the top banks that offer Fixed Deposit Double Scheme:

• Bank of Baroda: This bank has a scheme known as ‘Baroda Double Dhamaka Fixed Deposit.’ It assures to double the deposit money of investors. You can deposit any amount ranging from Rs.5,000 to Rs.1 crore. For senior citizens, the duration for the deposit to double is 105 months and 3 days. For others, it is 112 months.
• Tamilnad Mercantile Bank: This bank offers a ‘Double Deposit Scheme’ to both individuals and companies. The doubling period for senior citizens is 98 months and 10 days. The doubling period for others is 104 months and 11 days. The minimum amount to be deposited is Rs.1,000.
• Oriental Bank of Commerce: This bank has ‘The Oriental Double Deposit Scheme’. The minimum amount for this scheme is Rs.1,000. For senior citizens, the money will double in 105 months, for staff members, the money will double in 99 months, for the general public, the money will double in 114 months, and for former staff, the money will double in 96 months.
• Allahabad Bank: This bank offers the ‘Double Deposit Plan’. In this deposit plan, the funds do not get doubled as such. However, you will receive compounded interest on a quarterly basis on your deposit. This will give you better returns. The minimum amount to be deposited is Rs.1,000.
• Punjab National Bank: This bank offers the ‘Dugana Fixed Deposit Scheme’ which doubles your funds. You will have to deposit a minimum of Rs.5,000 to enjoy the benefits of this financial plan. Your funds will get doubled within 99 months.

You need to keep in mind that the tenure for your double deposit scheme will be determined by the bank and not by you. You can choose a Fixed Deposit Double Scheme if it suits your financial goals. It is flexible and simple in nature.

Small Finance Banks Compete for Term Deposits as Interest Rates Fall

Banks across the country are flushed with currency since demonetization of two of the most popular currency notes – Rs.500 and Rs.1000 was announced by Prime Minister Narendra Modi on November 8, 2016. In lieu of this move, interest rates across deposits and banks have been falling ever since and SFBs or Small Finance Banks are competing with each other to offer the best possible rates on the table.

How are SFBs capitalizing on interest rates post demonetization?

The main reason for slashing the interest rates off deposits have been to keep in check with the offtake of slow credit as the aftermath of demonetization. Customers of SFBs are now being offered interest rates that are up to 200 bps or basis points higher than the current market rates. Take for instance, Suryoday Micro Finance – the bank is offering its termdeposits at an interest rate of up to 9% p.a. depending on the tenure and senior citizens will receive an additional interest rate of 0.75% p.a. Even their savings accounts are being offered at an interest rate of 6.25% p.a. for up to Rs.1 lakh and for deposits between Rs.1 lakh and Rs.10 lakhs, an interest rate of 7.25% p.a. is being offered.

Utkarsh is another SFB that is offering their term deposits with interest rates of up to 8.5% p.a. and an additional interest rate of 0.50% p.a. for senior citizens. Utkarsh is also set to open 50 new bank branches over the span of 2 months and upgrade its present MFI or Micro-Finance Institutions into full-fledged banks this April, as communicated by the bank’s managing director, Govind Singh.

Ujjivan is another SFB that is prepared to offer interest rates on deposits that are higher than the prevailing market rates. Ujjivan’s focus so far has been only on wholesale deposits, but it is also preparing itself to raise interest rates for its retail deposits in the near future.

Equitas is offering interest rates up to 9% p.a. on their term deposits and between 6% p.a. and 7.5% p.a. on their savings account.

Capital Small Finance Bank is offering 4% p.a. interest rate on their savings account and 7% p.a. on their term deposits for a tenure between 5 years and 10 years. For senior citizens, the bank is offering an interest rate of 7.2% for a tenure of 400 days.

What does the future look like for SFBs?

The cost of funds for a majority of these Small Finance Banks have been 11% or more. However, as many SFBs are gearing themselves to convert their existing businesses into banks, their cost of funds will most definitely come down even if they are offering interest rates higher than the prevailing market rates.

However, most of the SFBs are said to initially focus on micro lending before transitioning into full-fledged retail banking. Due to this focus, most of the SFBs are proposing to keep their MCLR or Marginal Cost of Funds based Lending rate high.

According to the norms put forth by the RBI (Reserve Bank of India), SFBs have to start their operations latest by this April. RBI granted licenses to 10 SFBs in September 2015 and recently, 11 companies have been permitted to start payment banks.

3 Important Tips To Earn The Most Out Of Your Fixed Deposit Investment

The world economy is currently undergoing a bit of a slump. While it has marginally come out from the 2008 stock market disaster, there hasn’t been a full recovery. As such cases are never too far from happening, a vast majority of of investors are taking conservative decisions particularly when it comes to safeguarding their hard-earned money.

In this article, you will find some of the most important tips if you want to earn the most out of your fixeddeposits.

1. Research All The Way

Fixed deposits are traditionally the safest investment option when compared to mutual funds or stock as the returns you get aren’t linked to the economic conditions. Ideally, an FD would get you returns of about 6% - 9% on your investment.

In order, for you to get the most money out of your fixed deposit you will need to do your due diligence to find the best offers. One way to do this would be to get in touch with a handful of top banks or NBFCs and get a quotation of the rates they offer. Once you have all the offers in hand, you can select a deal that gives you the best interest rate.

2. Split Your Fixed Deposits/Term Deposits

If the interest on your fixed deposits/Term Deposits earn more than Rs. 10,000 a year, they will be eligible for a Tax Deduction at Source (TDS), which can be up to 10%. In order for you to make sure the deduction doesn’t happen, you can split your deposits such that the total interest earned would not be more than Rs. 10,000 a year.

Doing so can also be advantageous for you because you wouldn’t have to withdraw your entire FD if and when a cash crunch arises. Instead, you can break one or two while others will keep getting you the predetermined interest like it used to.

However, an important aspect worth noting is that you will need to mention the FD earnings when you file your tax returns, unless you want the IT department to come knocking on your door for tax evasion.

3. Refrain From Making Regular Interest Withdrawals

Every FD you apply for provides you with a number of options: one, withdraw the interest every month or quarterly or let it rest and gain more interest. When such instances occur, choose the latter. This is because when you withdrawing the interests regularly, you will not get the benefit of your FD’s interest compounding.To tackle this situation, you can reinvest the earnings to let it earn much better returns.

Advantages of a Fixed Deposit Account

Many times you may have heard people advising you to invest your money in a FD account. So what is FD? Fixed Deposit or FD is a type of term deposit that gives you a fixed Deposit rate of interest until maturity. By investing in FDs you can save and earn money at the same time. It also offers a higher rate of interest compared to a regular savings account. Apart from this, there are other advantages of having a FD account.

Mentioned below are a few advantages of having a FD account:

• Assured Return – If you invest your money in a fixed deposit account, you are assured a return. You will earn interest on your deposited amount, but the rate of interest depends on the tenure you have chosen. Banks in India are offering around 7% to 8% interest on Fixed Deposits at present.
• Flexible Payment – FDs allow you to choose how you wish to receive interest. You can choose to be paid annually, monthly or during maturity.
• Flexible Tenures – Fixed Deposits have flexible tenures. You can open a FD account for as less as 7 days. The tenure options are not the same for every bank. Also, it is not mandatory for you to have an account with a particular bank to open a FD account with it.
• Helps during Emergency – During emergencies when you are in need of money, a FD can help you a lot. Many banks offer loans against Fixed Deposits. Up to 90% of the deposit can be availed as loan. Some banks allow partial withdrawals of FDs as well.
• Risk Management – Financial instruments such as mutual funds, gold, etc., may provide high returns, but are also very risky. To adjust this market risk, it becomes important to invest in debt instruments. FDs will help you manage this risk as the returns are fixed.
• Easy to Withdraw – You can withdraw the amount you have deposited in your FD account at any time. For premature withdrawals, banks may charge you a small penalty.
• Saving Habit – Fixed Deposits help people in developing a habit of saving money. When you invest a certain amount in FD, that amount cannot be used until you withdraw it or maturity.

These are some of the benefits of investing in fixed deposits. You can open a FD at any time and the application process is also very simple. Just make sure that you select the right tenure.

How to make the most of your Fixed Deposits

For a vast majority of Indians, Fixed Deposits was one of the few investment options available. Besides, they were relatively risk-free and would accumulate a small percentage of interest every month and was all in all the most sought after investment avenues.

Fast forward to 2017, where SIPs, ELSS, and countless other products have popped up with the promise of offering bigger and better returns. But, despite all their advantages, they are still connected to the market, making them a riskier proposition, especially considering the trigger-happy economies of the world right now.

In this article, we will talk about the best ways to make use of an FD. Curious to find out? Read on.

• Choose the right tenure

FixedDeposits are typically available for tenures ranging from 7 days to 10 years. The catch with these is that, longer tenure deposits often provide higher returns as well as benefits. But, when you enough money to open an FD, you should never be overly enthusiastic about the returns alone. Take you time and understand your financial requirements.
Say, for instance, you have a major expense planned for an occasion that is two years down the line. Make sure to open an FD that corresponds to that exact period. While at it, you can also consider special tenure FDs for 333 days and 666 days that banks offer when they are in need of immediate funds. Such schemes come with a marginally higher interest rate than regular FDs.

• Get the best payout option

FDs usually come with different payout options. For instance, you can choose to withdraw the interest your money earns on a monthly, quarterly, half-yearly and yearly basis, or let it accumulate so as to collect the principal + interest at the time of maturity. Choosing the reinvest the interest into the deposit will give you a considerably larger corpus after the tenure.

• Never go for premature withdrawal

You may already know that premature withdrawals are possible on fixed deposits, but what you might not know is that every time you do so, you will have to pay a penalty. Meaning, you are likely to lose whatever interest your money has accumulated. An alternative to this would be to split your amount and invest in multiple FDs for varying tenures. This will help you mobilise funds for emergencies without needing to pay any sort of penalties.

• Always go for a tax-saving FD

The entire reasoning behind going for an FD is to save money but your attempts are mooted if you are liable for tax deduction. For instance, FDs that offer returns of more than Rs.10,000 will be taxed depending on the investor’s tax slab. A way to beat this would be to submit Form 15 H/G to the bank. Note that these forms will not absolve you from paying tax for your returns and to mention the money in your IT returns. To skip paying tax on your FD altogether, you should invest in tax-saving FDs, which often come with lock-in periods.

Overall, FDs, like any other investment, can offer you good returns but only when you use the right strategy and following the aforementioned points will help you make the most out of your FD.

Best avenues to invest in 2017 to get higher returns

The last quarter of 2016 saw one of the most landmark decision taken by an incumbent Prime Minister in the country’s 69-year history since its freedom. PM Narendra Modi, with inputs from the Finance Ministry, brought into effect the demonetisation of Rs.500 and Rs.1,000 notes. This move, although took the country into a near meltdown, has somewhat appeared to stabilise the economy for the long haul.

However, one of the prime effects of demonetisation was that avenues that were deemed profitable for investors lost their charm. In this article, we will talk about a few instruments you can invest in to get better returns for your money.

• Post Office Recurring Deposit

The age-old Indian post office has undergone a major paradigm shift over the last few years in a number of ways. Of the many, one of the things that stand out is the introduction of deposit schemes. These schemes offer good returns for investors and is almost matchable with fixed deposits of similar terms. At the time of writing this article, post office deposits offer 7.3% returns, which compounds quarterly, for a 5-year period. Read More

For instance, a regular Rs.100 investment will yield a return of Rs.7,250.50 returns once the scheme matures.

• Public Provident Fund (PPF)

Public Provident Funds (PPFs) has long been one of the most preferred investment avenues for a vast majority of risk-averse working professionals. These funds mature after a 15-year period and offers an opportunity to renew for 5 years every time from there on. Besides, PPF is also eligible for tax deduction under Section 80C of the Income Tax Act.

• Sukanya Samriddhi Account (SSA)

SSA is basically available for parents of a girl child, which enables them to invest so as to build a corpus to fund the education and other things relating to the girl. This account requires a minimum of Rs.1,000 to be opened and the guardian can add multiples of Rs.100 every time they want to add to the account. The account has an upper limit though, meaning parents can only invest a maximum of Rs.1.5 lakhs per calendar year. A benefit of this account is that it is available for tax deduction while the returns non-taxable. Also, the maximum interest such accounts offer stands at 8.5%

• National Savings Certificate

National Savings Certificate (NSC) is yet another save avenue that offers guaranteed returns. Currently, the returns offered stands at 8% for a five year term. An account can be opened for as less as Rs.100 while there is no upper limit to the amount that can be invested. An advantage of this fund is that you can use it as collateral for any loans.

These are some of the best investment options you can invest in if you are tired of fixed deposits and their falling interest rates.

Lookout for the best bank deposits

With the bank’s revising their interest rates offered on fixed deposits, it has become hard to work out which banks are offering the best interest rates on fixed deposits.

The banks began cutting down the interest rates on fixed deposits towards the end of 2014 as the Reserve Bank of India cut rates by 75 basis points. Across one to five years, most banks lowered their interest rates by 50 to 75 basis points. Few banks like Canara bank, Punjab National Bank, Indian Overseas Bank, United Bank of India, Vijaya Bank and Oriental Bank of Commerce have made deeper cuts. Canara Bank reduced the interest rate on deposits of one to five years from 9 percent to 8 percent in the past four months. Since the interest rates are on a downward cycle, further rate cuts are expected. Lakshmi Vilas Bank fixed deposits and Karur Vysya Bank fixed deposits are offering the best rates.

Longer term deposits’ options

Investing in a longer term deposit makes sense at this stage as shorter term deposits will offer you less interest on the money you will invest. In case you have no immediate need, then consider investing in deposits from three years to less than five years. For the three to less than five year term, Lakshmi Vilas Bank fixed deposits and DCB Bank fixed deposits are currently offering the highest interest rate at 8.6 percent. It also offers fixed deposits for a minimum opening balance of Rs.100. the interest is compounded on a quarterly basis for the cumulative deposits made. The interest pay-out option is also made available. DCB has a minimum deposit of Rs.10,000 and if you are choosing the cumulative option, then the interest will be compounded. DCB deposits can be opened online.

Karur Vysya Bank on the other hand offer slightly lower rates on their fixed deposits. The bank offers 8.5 percent for the three year time frame deposits. Currently, it is hard to predict how the interest cycle will unfold and it is not wise to opt for fixed deposits for tenures of five years and above. It is also advisable to go for a cumulative option if you require a regular monthly cash flow.

Shorter term deposits

It is ideal to invest for at least three years. Lakshmi Vilas Bank will pay 8.6 percent interest for deposits of one year and above. DCB offers 8.55 percent interest for deposits between 12 and 24 months. Karur Vysya Bank, Andhra Bank and TMB will offer you 8.5 percent interest on one to two year deposits.

Then there are also the special deposits schemes that will offer higher rates. TMB’s has 555-day deposit that gives 8.6 percent interest and State Bank of Patiala offers 8.52 percent interest on one to 555 days deposits.

Why fixed deposits are a good choice?

FD (Fixed deposits) are the safest and simplest form of financial instruments. The interest rate on fixed deposits are higher than that offered on savings account. Some banks offer loans against Fixed Deposit Certificates at competitive interest rate. Some banks also offer credit card with the credit limit up to the amount of the fixed deposit amount. Fixed deposits are permitted for up to 10 years only. The longer the term period, higher is the interest rate provided the repo rates don’t fall. The companies nowadays offer company fixed deposits. But these are not regulated by the RBI.

Company Fixed Deposits are deposits placed by investors with companies for a fixed period of time at an agreed rate of interest. The Financial Institutions and Non-Banking Finance Companies accept the Company Fixed Deposits. They are mobilised by the government under the Section 58A. They are unsecured deposits and therefore if the company defaults, the investor cannot sell the documents to recover the capital. Thus making it a risky investment decision. Company fixed deposits are provided when the companies need cash flow but cannot issue shares, they offer fixed deposits at profitable rates. 

The yield on your deposits vary from individual to individual. You can earn higher interest than that of your colleague as u are in a higher tax bracket and the investment returns are less. You need to optimise the fixed deposits’ utilisation. It can be done through building an emergency fund by opening a fixed deposit account. The money kept aside for emergencies can also earn returns. When a person is setting up new investment base, it is advised that he open a deposit account rather than taking credit. The fixed deposit will appreciate his income potential. By investing in deposits, the individual is ensuring that he has a safety cushion of money to back him up.

When you are investing do not end up investing in high risk investments such as moving investments in equity sector, commodities or even real estate for that matter. You can instead even it out with investing in bank or company fixed deposits. If you wish to save taxes, then you can invest for fixed deposits in your parent’s names as long as they don’t have taxable income. The interest earned on the fixed deposit is tax-free for up to Rs.2 lakhs and up to Rs.2.5 lakhs if they are senior citizens. Senior citizens also earn 0.25% to 0.5% additional interest on the fixed deposits. You can also invest in your eldest child’s name and save interest up to Rs.2 lakhs as it is tax-free.

Fixed deposits also play an important role in the consolidation of investments when you approach retirement. When you are retired, you don’t really have a fixed source of income other than pension. That is when fixed deposits play a pivotal role. You can invest in fixed deposits for different tenure to meet you various financial needs in the future.

But, be very careful when you choose the bank to invest your fixed deposits in as the small co-operative banks may not be able to secure your money at the time of bankruptcy. The rule is that the bank must secure each investors for up to Rs.1 lakh per investor per bank. But, the company fixed deposits do not have any assurance as they are not regulated by the Reserve Bank of India. Keep in mind that the company fixed deposit are unsecure and you have no collateral. But since the risk is higher, the interest rate is also higher. Exercise caution before investing.

Why Non-Convertible Debentures beats Company Fixed deposit

An NCD might not ring a bell in the minds of most Indian investors but is quite popular in the western world. The concept of issuing NCD’s is relatively new to India, having been first issued by SBI in 2008-09 to retail investors. The bonds are listed on BSE/NSE retail debt terminal.

Why ncd beats company fixed deposit from Sathish Mithun

Advantages of investing in NCD’s v/s Bank/Corporate Deposits

1. ·         NCD’s are in demat form- eliminates hassle of maintenance and safety of physical certificates.
2. ·         NCD’s can be traded- The bonds issued under public offer are listed on the BSE/NSE. Absence of lock in period ensures the investor can exit before maturity.
3. ·         No TDS Deduction- Since the bonds are in demat form and are listed there is no TDS.
4. ·         Opportunity to earn profit- The bonds are listed and traded on the market, which gives an opportunity to trade and earn profits. The value of these bonds is inversely proportional to the interest rates in the economy.
5. ·         Secure- Unlike Bank deposits which can generally be insured upto a certain limit, around Rs.1 lakh in most cases, NCD’s are secure in nature.
6. ·         Pledging of NCD’s- Bonds can be pledged with banks/NBFC’s to avail a loan or overdraft facility.
7. ·         Flexibility in tenure of maturity- The tenure of NCD’s could range from less than a year to 30 years. This acts as a buffer against reinvestment risk and also offers a steady source of income through interest.
8. ·         Earn interest income till date of transaction- If an investor sells the bonds before their maturity he/she will get the accrued interest till the date of the sale.
9. ·         Multiple interest payment options- An investor has the option to choose either cumulative payment or regular payment on interest.
10. ·         No settlement risk- The transactions are confirmed off-market but are settled on the NSE/BSE platform, thus eliminating settlement risk.