Thursday, 19 June 2014

Things to Consider Before Investing in Fixed Deposits

Fixed deposits have traditionally been one of the most popular investment options because they guarantee you good returns. Moreover, you are also able to ensure that your savings are safe throughout the tenure of these deposits. The interest rate on these deposits is also a lot higher than your regular savings accounts. You can use the FD Calculator to know more about the interest you are going to get on the deposit from a particular bank. It helps you make a wise decision when you have to choose between fixed deposit options from several banks.
But the interest you get cannot be the only factor you bear in mind when investing in fixed deposits. There are several considerations that have to be taken into account to ensure that you get the most out of this stable and lucrative investment option.

     You have to realize fixed deposits up to Rs. 1 lakh are backed by deposit insurance. Hence it’s a good idea to have a few FDs with principal up to Rs. 1 lakh rather than have a lump sum amount into one FD.
     One worry many investors have is that they might lock their investments on what could be lower interest rates for long durations. To combat that, you can firstly use the FD Calculator to make sure you are making the best possible choice. You can then divide your investments into smaller amounts that can be invested in FDs of varying tenures.
     When you lock in an FD you are better off choosing one that compounds the interest in a shorter time span. Usually quarterly compounding interest FDs should be given precedence.
     It’s also important to remember that senior citizens get slightly higher interest rates on FDs for the same amount of time.
     There are many different financial institutions and cooperative societies that offer fixed deposit schemes along with reputed banks in the country. It makes it imperative to know more about the organization you are going to invest in and its credibility, as well. It will ensure that you are making a safe and sound investment decision with your hard earned money.
     FD Calculator is a smart, simple and convenient option for you to pick the best fixed deposit option available in the market today. Choosing between hundreds of fixed deposit schemes from various banks and financial institutions can seem daunting. That’s the reason several consumers opt for the first fixed deposit option that comes their way. It can be a decision that costs you dearly, especially since there’s no reason for it when you have these calculators to rely on.
     There are fixed deposit options that can bring you tax saving benefits at the end of the year. Deposits of up to Rs. 1 lakh kept for a period of over five years can bring you substantial tax saving benefits. Hence if that’s one of the aims behind your investments then it makes sense to opt for these FDs.

FD Calculator can give you a fair idea about interest rates, but there are few other factors that you have to think about when investing in FDs.

Friday, 13 June 2014

Best fixed deposit schemes from SBI

Most people do not venture into FDs because of the fear that when they have a sudden need for money, they may not be able to access it due to the rigidness of the scheme. Many banks now consider these aspects and design fixed deposit product that addresses all your concerns. When banking is moving to highly customer friendly ground, never let your money just sit in a savings account that offers very less interest. Let’s see here how the Fixed Deposit schemes offered by State Bank of India can help you in achieving your financial goals.

About SBI

State Bank of India is the largest financial institution in India. It is a government owned corporation and a multinational financial institution, which has become synonymous with the word ‘trust’.  For any Indian, SBI would be a name that comes first to mind whenever he thinks of investment options.

How Fixed Deposit Schemes of SBI helps you?

There are several types of fixed deposit schemes offered by SBI. In Case of SBI FD Rates, Each one has its own features in terms of interest rates and returns.

For Parents

If you want to save for the future of your children, a fixed deposit can be the ideal kind of investment. SBI offers junior savings plan that are built to suit exactly the needs of parents. You will not have to worry about education funds once your child grows up. You can keep adding to the deposited amount through roll over facilities. As you keep adding to the deposit amount the rate of interest also increases considerably. You can further link the interest earned from the FD to a savings account. The interest earnings can take care of your additional expenditure or become another savings option for your child.

For the Retired Community

Fixed Deposit is a great way to plan your retirement. If you plan smartly and put away a certain amount of money throughout your employment years it will come in handy during retirement.  If you do not work for a company that gives pension, investing in Fixed Deposit is an ideal retirement plan. By the time you retire the money that you have saved as Fixed Deposit will earn enough interest to take care of your monthly expenditure. You can spend the rest of your retired life with peace of mind with the monthly interest gaining from your FD.

Middle aged Professionals

Professionals can take advantage of both short term and long term Fixed Deposit schemes offered by SBI. Investing in FD not only offers you higher returns, but helps you for your long term and short term financial goals like purchase of property, children’s education and marriage.
The best way to maximize the benefits of FD is to choose a longer tenure. Also one should allow the interest to be accumulated in their account, which is a sure shot way of increasing your savings systematically.

Fixed Deposit schemes offered by SBI

General Interest Rates (w.e.f. 18.02.2014)
Interest Rate for Senior Citizens (w.e.f. 18.02.2014)
7 days to 90 days
91 days to 179 days
180 days to 210 days
211 days to less than 1 year
1 year to less than 2 years
2 years to less than 3 years
3 years to less than 5 years
5 years and up to 10 years
8.75 is the best platform to understand the FD schemes offered by SBI and the various benefits associated with it.

Wednesday, 11 June 2014

Top Banks offering loan against FD

One of the biggest advantages of investing in bank fixed deposit accounts is the easy availability of loans against fixed deposits. Unlike a lot of other investment options that need to be nullified when faced with a financial crunch, fixed deposits allow users to avail quick loans as high as 90% of their fixed deposit value. This not only increases the liquidity offering of the investment but also makes sure that the investment remains untouched and continues to compile interest for the loan tenure. Loans against fixed deposit accounts are structured similar to bank overdrafts although different banks have different rules for offering loans against fixed deposits.

Loan against Fixed Deposit

Overview of Loan against Fixed Deposits:

Almost all private and public sector banks offer users the options to avail loan facility against their fixed deposit investments. The banks however have fixed certain minimum period for fixed deposit investments to be in place before loan requests can be facilitated. The period of minimum investment varies from bank to bank and the bank is the final decision making authority in case of any requests from the fixed deposit account holders. For example some banks like HDFC bank usually offers loans only after a minimum six month period from the date of opening the fixed deposit account. Public sector banks like State Bank of India or Punjab National Bank or PNB however do not have any such restrictions and loans against fixed deposits can be requested the very next day.
Depending on the account type of the fixed deposit, loan facility is available for against all deposits including NRE / NRO / FCNR while still retaining ownership. However once a loan is sanctioned against a fixed deposit account, deposits cannot be prematurely withdrawn. For NRE and NRO fixed deposit accounts, 90% of the deposit amount is eligible as loan or overdraft limit. In case of an FCNR fixed deposit account, 70% of the deposit amount is available as loan. The Bank is the final authority on deciding the quantum of the loan for any fixed deposit account.

Interest Rate and Loan Processing Fee: 

Interest rate for loans against fixed deposits is usually 2 to 3% higher than the interest rate being offered for the underlying fixed deposit. For example if an individual has a fixed deposit of Rs. 1 Lakh earning a rate of interest of 9% per annum and taken a loan against the fixed deposit she or she will have to repay an interest rate of 11 to 11.5% which is 2 to 2.5% higher than the interest received through the fixed deposit.  Most banks do not charge any processing fee while offering loans on fixed deposits. This is mainly because of secured nature of the loan. Some banks on the other hand have a policy of charging a small loan processing fee for every fixed deposit loan request. It is recommended to check with your bank about any such fee before opening a fixed deposit account. There is however no foreclosure fee or any extra charges in case a user decides to pay back the loan before its tenure or foreclose the loan. 

Tuesday, 10 June 2014

Different Types of interest rate in Fixed Deposits

One of the most rampant types of investment in India is the Fixed Deposit. It enables one to invest his/her funds for a stipulated period of time with a financial institution at a particular rate of interest. FDs can be of 2 types –
     Issued by a bank or a NBFC that is regulated by the Reserve Bank of India
     Issued by a Corporate looking to raise funds from the ‘open’ market
While there are variations in the rates of interests paid against FDs issued by banks and corporates, the latter usually pay a superior rate due to the fact that they carry more risk as compared to bank FDs, and they lack the aspect of easy liquidity generally implied in the former.

fd interest calculator

Types of interest rates for FDs
At the base level, FD interest rates can either be ‘Fixed’ or ‘Floating’.

Fixed Rate FDs

As understandable, fixed-rate FDs are offered at a fixed rate of interest for a specific deposit period. The investor can hereby look forward to get a definite and assured return as per the contracted rate after the tenure expires, no matter where the base rate in the market stands. The product is safe, guaranteed and built to generate a regular income within the deposit tenure.

Floating Rate FDs

Floating rate FDs are offered at a variable rate of interest for a term. SBI for instance has it on offer. A floating rate deposit, however, comes without a guarantee of sure return as the interest rate is liable to change with a change in the BR or the base rate of the bank. Hence, it is an option which should be picked only if the investor is ready to receive flexible returns. If the base rate increases the investor will gain but if it falls, he/she might wind up losing much more than a fixed-rate investment.

At higher level FD interest rates depend on the following factors –
     Deposit period
     Institution type
     Deposit amount
Most financial institutions offering FDs have an FD interest calculator included in their websites whereby interest to be earned on the deposit money can be calculated easily. Some institutions might refer to the same as ‘Term deposit calculator’ as FDs are also popularly known as Term Deposits.

Depending on the tenure of the FD made, interest rates can be calculated –
     On quarterly basis (banks in India employ quarterly compounding for calculating interest in Rupees)
     @ simple interest (mostly seen in FDs that are made for below 6 months)
In instances of premature encashment, the FD interest rate is computed as per the rate that is applicable for actual deposit period, and a penalty may/may not be levied, depending on the institution’s policy.

It’s important to remember that at certain times when the economic scenario of the country reels under high inflation, RBI has the freedom to take up a stringent monetary policy whereby it can enhance its repo rates, that is, its lending rate for banks. In line of that, banks can also hike their loan rates and FD interest rates, both. At these times, FDs are the most lucrative form of investment with high-return and no-risk assured in them.

Monday, 9 June 2014

Compare Fixed Deposit Interest Rate Using FD Calculator for Smart Decisions

Fixed deposits are a popular option when it comes to people’s savings in the country. That’s because banks tend to offer a much higher interest rate on these deposits than your regular savings or current accounts. That’s why you can ensure that your savings grow substantially within a stipulated period of time. The tenure of the fixed deposits can vary, and you can pick the option that’s suited to your requirements. But you have to understand that withdrawing your savings before the maturity period can involve penalties, which you should try and avoid.

Practically all major banks in the country offer fixed deposit options for their customers. However, they can vary to a great extent, which is why certain factors have to be taken into consideration before opting for them. Fixed deposit interest rate is the primary criterion that most consumers think about right at the onset and with good reason too. It will determine the amount you get after the maturity of your fixed term deposit. If you want to make a smart choice amongst various options available to you in the market then you can make the most out of the convenience offered by FD Calculator.

What does the calculator do for you
FD Calculator is a tool offered to you so that you can find out the interest you can earn on your fixed deposit at the end of the tenure. Most banks offer quarterly compounding interest, which can be otherwise tricky to calculate. But with the help of this calculator you can handle the task easily and make sure you are on top of things. Compounding of interest is done on monthly, quarterly, half yearly or yearly basis and once you have taken that into account, you can arrive at the value of your investment on maturity.

Compare different products in the market
As mentioned earlier, practically all the major banks in the country offer fixed deposit schemes for their consumers. Not only are there different tenures for these deposit options, they have corresponding interest rates attached to them, as well. Choosing the right fixed deposit as an investment option for you can be a task, which is simplified with the help of an FD Calculator. Now you have the option of looking at offers from top banks like HDFC, AXIS, ICICI and more, compare the interest rates and make a sensible financial decision.

A convenient option right at your fingertips
The good thing about these interest rate calculators is that you can easily find them online, and they are accessible to you at any time. Using them is quite simple, and you don’t have to have any kind of financial expertise to calculate or compare interest rates on fixed deposits. You can get the job done within hardly any time and thus you can make your investments at the earliest so that you can get optimum benefits out of them. Importantly you will get much needed peace of mind knowing you have made the right decision too.

FD Calculator helps you compare interest rates on fixed deposits so that you can opt for the best deal possible. 

Thursday, 5 June 2014

All About SBI FD Rates

State Bank of India is by far the most popular bank used by all sections of society in urban as well as rural India. State Bank of India is not only the biggest public sector banks but is also one with a wide branch network, making it easily accessible. State Bank of India offers fixed deposit accounts along with its core banking operations and services.
sbi fd rates

Unlike a large number of private banks and non banking financial companies, State Bank of India has a stipulated a small amount of Rs. 1000 as the minimum amount needed to open a fixed deposit account. Users opening a fixed deposit account with State Bank of India have the option to choose the payment mechanism of interest from monthly, quarterly or calendar quarter basis. Interest rate once fixed is does not change irrespective of change in the rate thereafter.

The bank allows individuals to take loans or overdraft facility on their fixed deposit accounts. Loans and OD facility is available for as high as 90% of the fixed deposit account. Senior citizens opening a fixed deposit account with State Bank of India get an additional 0.25% on the stipulated rate of interest. Nomination facility is available and recommended for all fixed deposit accounts in State Bank of India.

State Bank of India offers lucrative interest rates for fixed deposit account holders. The rate of interest for investments below Rs. 1 Crore ranges from 7.5% for 7 day to 90 days tenure to 9% for 5 years and up to 10 years. Members of SBI Staff and SBI pensioners receive an additional interest rate of 1.00% above the applicable rates. Senior citizens above the age of 60 years receive an additional 0.25% above the stipulated interest rate.

Features of State Bank of India Fixed Deposits:

State Bank of India offers a wide range of tenure period ranging from 7 days to 10 years making FD accounts suitable for all sections of society.  Loan and overdraft facility can be availed without any minimum time limit from the opening of the fixed deposit. Loan can be availed as soon as the ext working day from the day of the opening of a fixed deposit account. Interest is paid on monthly intervals on discounted rate or at a calendar quarterly basis as selected by the individual investor at the time of opening of a fixed deposit account.
 State Bank of India deducts TDS when the interest paid or accrued for the investor exceeds the maximum limit of Rs. 10,000 in one financial year. TDS would not be deducted in case the individual submits form 15G or 15H as per their individual case. State Bank of India offers the individual fixed deposit account holder the flexibility to renew the FD. Automatic renewals take place in case no maturity instructions are given by the investor.

Premature Withdrawal of SBI Fixed Deposits:

State Bank of India charges a premature withdrawal penalty to the tune of 0.50% per annum for all fixed deposits below Rs. 15 Lakhs. In case of fixed deposit accounts higher than Rs. 15 Lakhs that have remained with the bank for a minimum period of 7 days, no premature withdrawal penalty is levied.