Which FD to go for?

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m-jeri

m-jeri

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Hi,

So, my next monetary query.

Which FD is to go for? There is some option in ICICI Netbanking itself to create a FD. Is that good? Never created one before. A believer of Gold. :)

From ICICI, can anyone explain these to me?

Type of Deposit : Cumulative FD, Tradition FD with Monthly, Quarterly and Periodic Interest Payout. ???
Tenure of Deposit (Years) *
Tenure of Deposit (Months) *
Tenure of Deposit (Days) *

Am i supposed to pay every day? Or like if i want the FD to be for 1 year, I should put 1 year and 00 months and 00 days?

PAN
(PAN is compulsory for FD requests of Rs.50,000/- and above)
Maturity Proceeds *

Auto Renewal and Credit back to savings account?

I am not looking for some high amount ones. Or dunno, is it good to do amounts whenever i get like 20 or 30 k each? ? or accumulate and do it in one big amount?

Thanks.
 
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Someone had posted about Sweep-in accounts in another threads. Check that out. Basically you get the same interest rates as that of an FD and you can keep adding money to the account as you please. Benefit is that if you want money urgently, you can take it out quickly as it is not tied up. You will have to read up on how they calculate interest in that case. Having said that, it has become easier to terminate FDs these days. I needed some money urgently one day so I logged in to my HDFC bank account, terminated the FD online(it showed me exact interest, fines etc.) and I had the money in my account in 5 mins.
 
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A sweep in account is convenient. Am surprised they offer the same rates as FD's.

FD money isn't locked in, you can break them without penalties. They give you interest according to the term. That's the case with canara and sbi too.
 
I am not sure sweep in accounts offer same interest rates are regular FDs. If yes, maybe its a good option.

Regarding ICICI's online FD, it is like regular FD. My wife uses this frequently for shorter terms. You can check for the interest rates for the time and specify the duration accordingly. You will have an option to auto renew (I guess its for same period or 1year) or it will be moved to your savings account after expiry. Again you can choose as per your requirement.

Would be better if you compare interest rate in PSU banks and then decide.
 
My mom has a sweep in account in SBI. Rate of interest for the sweep in is 9%. Maturity is one year. But of course, it can be transferred any time without any penalty.
 
rdst_1 said:
Someone had posted about Sweep-in accounts in another threads. Check that out. Basically you get the same interest rates as that of an FD and you can keep adding money to the account as you please. Benefit is that if you want money urgently, you can take it out quickly as it is not tied up. You will have to read up on how they calculate interest in that case. Having said that, it has become easier to terminate FDs these days. I needed some money urgently one day so I logged in to my HDFC bank account, terminated the FD online(it showed me exact interest, fines etc.) and I had the money in my account in 5 mins.
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How come they offer same interest rates as FD and doesnt have the lock in period.
In that case why would anyone go for FD?
 
m-jeri said:
Hi,

So, my next monetary query.

Which FD is to go for? There is some option in ICICI Netbanking itself to create a FD. Is that good? Never created one before. A believer of Gold. :)

From ICICI, can anyone explain these to me?

Type of Deposit : Cumulative FD, Tradition FD with Monthly, Quarterly and Periodic Interest Payout. ???
Tenure of Deposit (Years) *
Tenure of Deposit (Months) *
Tenure of Deposit (Days) *

Am i supposed to pay every day? Or like if i want the FD to be for 1 year, I should put 1 year and 00 months and 00 days?

PAN
(PAN is compulsory for FD requests of Rs.50,000/- and above)
Maturity Proceeds *

Auto Renewal and Credit back to savings account?

I am not looking for some high amount ones. Or dunno, is it good to do amounts whenever i get like 20 or 30 k each? ? or accumulate and do it in one big amount?

Thanks.
Click to expand...

There are two types of FD .
One where you can take the interest after it is accrued quarterly and it is called the "Traditional FD".
The other one which is called "Cumulative FD" Here after every quarter, the interest gets added to the principle amount and then interest is calculated on that further.
So if we invest 10000 in the Traditional FD for like 1 year we get 10900.
But for a Cumulative FD we would get say 10970.

Even I had created the FD from my online bank account.
In FD you invest a lumpsome amount for a fixed amount of time.
For ICICI the ideal time was around like 390 days,, which offered max interest rate of 9%.
Rest of the period less than 1 year or greater than 1 year, the interest rate was less than 9% in ICICI. This was when i invested.
http://www.icicibank.com/interest-rates.html#fd
Dont auto renew it at the end of the Time period.
In case you break your FD before the stipulated time period, a certain penalty would be charged. For this you would need to read the banks's terms and conditions.
Also a point to be noted is that 10% TDS would be deducted if your FD earns an interest amount of more than 10000Rs. The addtional income from the interest needs to be shown while filing your IT returns :D More tax would be deducted. :D :D
 
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pradeep200417 said:
How come they offer same interest rates as FD and doesnt have the lock in period.
In that case why would anyone go for FD?
Click to expand...

I don't know but you can see the post above your's in which the guy is getting 9% interest on the Sweep-in account which is the same as FD rates.

pradeep200417 said:
There are two types of FD .
One where you can take the interest after it is accrued quarterly and it is called the "Traditional FD".
The other one which is called "Cumulative FD" Here after every quarter, the interest gets added to the principle amount and then interest is calculated on that further.
So if we invest 10000 in the Traditional FD for like 1 year we get 10900.
But for a Cumulative FD we would get say 10970.

Even I had created the FD from my online bank account.
In FD you invest a lumpsome amount for a fixed amount of time.
For ICICI the ideal time was around like 390 days,, which offered max interest rate of 9%.
Rest of the period less than 1 year or greater than 1 year, the interest rate was less than 9% in ICICI. This was when i invested.
http://www.icicibank.com/interest-rates.html#fd
Dont auto renew it at the end of the Time period.
In case you break your FD before the stipulated time period, a certain penalty would be charged. For this you would need to read the banks's terms and conditions.
Also a point to be noted is that 10% TDS would be deducted if your FD earns an interest amount of more than 10000Rs. The addtional income from the interest needs to be shown while filing your IT returns :D More tax would be deducted. :D :D
Click to expand...

TDS is only deducted if you don't fill the form 15g.
 
Thanks guys. So which Sweep in account should i go for?

And between Sweep in and Savings account, which one is better?
 
pradeep200417 said:
Also a point to be noted is that 10% TDS would be deducted if your FD earns an interest amount of more than 10000Rs. The addtional income from the interest needs to be shown while filing your IT returns :D More tax would be deducted. :D :D
Click to expand...
If TDS has been deducted then that's taken into account when you file your taxes. So there isn't any more tax deducted.

Either its done at source or later.
 
blr_p said:
If TDS has been deducted then that's taken into account when you file your taxes. So there isn't any more tax deducted.

Either its done at source or later.
Click to expand...

Actually it is not the right way to go about it. TDS is deducted at 10% but in actuality you may be required to give 30% as income tax depending on which tax bracket you belong to.
The right way to go about it is fill in the form 15g and then show the interest earned as part of your income and then pay the tax on the total.
That 10% TDS is just a stopgap measure put in place so that at least some interest gets charged in case people don't declare their income properly.
 
I've found it comes to the same when filing taxes, depending on the bracket you fall into. That 15g has some pretty probing questions.

There is no double taxation is my point.
 
blr_p said:
If TDS has been deducted then that's taken into account when you file your taxes. So there isn't any more tax deducted.

Either its done at source or later.
Click to expand...
actually you do have to show it while filing tax returns. Most of us dont show.
Like @rdst_1 said, initially tax is deducted by means of TDS and rest is supposed to be given while filing the Returns, depending on which bracket you fall into.
For people whose only source of income would be Interest from bank and they dont fall below the slab, the may fill the Form 15G to get the 10% back.
 
I have a HDFC bank account and they offer 8.75% interest on FD's for a year and above. :@

RD is 9.5% pa.

I've no clue why the RD interest rate is higher than the FD's but you should check if that's the case with your ICICI bank as well, in which case, I'd suggest you go for RD account.

BTW, when you say gold, do you mean physical gold or ..?
 
red-devil said:
I have a HDFC bank account and they offer 8.75% interest on FD's for a year and above. :mad:

RD is 9.5% pa.

I've no clue why the RD interest rate is higher than the FD's but you should check if that's the case with your ICICI bank as well, in which case, I'd suggest you go for RD account.

BTW, when you say gold, do you mean physical gold or ..?
Click to expand...
What? I have booked an FD few days back with HDFC for 1 Year @9% and rate for RD was 8.75%. I think you must check the rates once again.
 
Interest rate changes according to market scenario and RBI changes in repo and reverse repo rates.
If you people worried about those decimals.You can go for company FD from their Parent which gives 9.25% rates
http://www.hdfc.com/deposits/deposite_cards_rates.asp

Note::Company FD have its shortcomings.But since its from HDFC its highly secured and yes TDS applies when interest cross 5000.
 
ivhere said:
What? I have booked an FD few days back with HDFC for 1 Year @9% and rate for RD was 8.75%. I think you must check the rates once again.
Click to expand...

I just checked the HDFC website - they have 8.75 for FD's of 1 year. Abvove 1 year - its 9%.
I have a RD and that was 9% for a year and looks like they've updated the rate of interest recently to 8.75%
 
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