Fixed Deposit

POSTED BY Aman ON May 7, 2012 12:36 pm COMMENTS (6)

Can Fixed deposits be done for 20years period; if yes then which are the banks offering the same.

6 replies on this article “Fixed Deposit”

  1. Sonali Suman says:

    Hi Aman,
    I agree with the rest. The maximum time period for fixed deposits in India is not more than 10 years. In case you are looking for long term investments then opt for a PPF. A word of advice, if you plan to fix a huge amount then check the tax liabilities you could run. It would be beneficial to fix the amount on the name of a non-earning family member.

    http://www.dbs.com/in/personal/save-and-deposit/default.aspx

  2. Dear Aman, the max. period allowed for FD is 10Y. No bank is allowed to offer higher term beyond this point by RBI. FDs are not tax efficient.

    If you still want to invest in FDs, do so for 10Y term but try to invest under the name of family members who have zero or lower income than you.

    Thanks

    Ashal

  3. Give Instruction to renew is after completion of 10 years. Instead of having one Fixed depost of very long tenure, you can think of having mutiple fixed deposits of 6 to 8 years.

    This is how it goes. Go for Fixed deposit of X amount today, may be for 6 years. After year or so,go for another fixed deposit for 8 years, similarly 10 years.

    By doing this you will get money periodically in stages. Further in case of emergency you can break the one of the fixed deposits……

    Note : Invest in fixed deposits only if you are lowest tax bracket. the returns are taxable.

    1. Kunal Roy says:

      Dear Wealthucreate

      I guess the guy here is checking long term option as FD rates are at peak now and may not be same after 6 years so if the renewal takes place after 6-8yrs and the FD rates are like 2008-09 around 6-6.5 % he loses money.

  4. BanyanFA says:

    I don’t think that any bank offers fixed deposits for more than 10 year duration. I am glad to see that you are looking into the possibility of investing into fixed deposit for more than 5 year duration. It helps in gaining compounding effect of interest rates.

    As Kunal suggested, the better options for you are PPF. Alternatively, you can also contribute into PF on a monthly basis.

    Regards
    BanyanFA

  5. Kunal Roy says:

    Fixed deposits can be done only for 10yrs in banks but in case you want to long you can invest in bonds or PPF

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