Factors to Look Out For When Choosing Abroker For The Best Demat Account

Factors to Look Out For When Choosing Abroker For The Best Demat Account

Termed deposits are one way to invest your funds, especially your idle funds for any additional financial requirement in the future. Amongst all the available options, fixed deposits are an extremely favourable option that allows you to invest large amounts of funds at one time and earn good return on the investment. So how is the tax saving fixed deposit different from the normal fixed deposits? As the name suggests, the account would be tax free. Certain fixed deposits are viable for taxation. In order to ensure that your investment is tax free in this account, you must first know all the details of a tax free FD account. Given below are the details of this account: Any individual, which also include those belonging to the HUF’s are eligible to open tax saving fixed deposit accounts. Through this account, the account holder can claim tax deduction up to Rs. 1.5 lakhs in a financial year. However, this depends solely on the amount that has been invested in the account. Fixed deposits of this kind are mostly available for a tenure of five years. This account can be normally opened with any bank, with the exceptions of cooperative banks and rural banks. During this tenure, premature encashment is now allowed. Even pledging this account as a collateral for a loan is not valid. Through this account, the interest that is earned is taxable at a marginal rate. However, this is applicable only to the tax holder. However, the maturity proceeds are tax exempted. Tax saving fixed deposit can be easily held in a joint account. However, the tax benefit will only be extended to one account holder. Normally in this case, the first account holder is eligible for tax saving. These features by the tax saving fixed deposit will go a long way to ensure that you are eligible for a lot of benefits. Here are some of the benefits you can avail on opening this a/c under your name. One of the major benefits of this a/c is tax saving. Through this tax saving feature, you can save income tax. Thus in the long run, you will earn more by saving more. Fixed deposits allow you save small amounts. If you start investing small amounts on a regular basis, you can add to your savings until you can invest this sum in a fixed deposit. As premature withdrawal is not allowed in this a/c, you are eligible for fixed returns. This is exclusive of tax savings. Thus, by earning additional benefits, you can save more. The nomination facility is available for this a/c. Through this feature, you can nominate an individual within your family or friends to withdraw your deposit when required. This makes for convenient feature, especially in the event of your death, the nominated member can access your a/c and make use of the required transactions.

Leave a Reply

Your email address will not be published. Required fields are marked *

nine × = forty five