Is it good to invest only in Fixed Deposits?

POSTED BY niki ON April 10, 2014 11:43 am COMMENTS (10)

I save around 20k per month for the last 1 year. I invest all that amount in FDs earning around 8.5%.

Is it good to invest only in Fds? Or I should do something else other than PPF?

10 replies on this article “Is it good to invest only in Fixed Deposits?”

  1. ashalanshu says:

    Dear Niki, please take help of a fee only financial planner for a detailed help.



  2. ashalanshu says:

    Dear Niki, then start thinking on your future goals, aims, dreams and link your investment with these. Then check on your own, what should be your investment planning to get these goals? Should I say more?



    1. niki says:

      Yes. I think please suggest me ways. I think I need to discuss this with someone who can guide me.
      My parents dont want me to put my money into share market. I come in 10% tax bracket.

  3. ashalanshu says:

    Dear Niki, you mean to say you are opening multiple FDs each month with out any thought for your future, goals, dreams?



    1. niki says:

      yes.. it is

  4. manikambh says:

    It depends on the investors income if the taxable income is more than 2 L then yes tds is applicable even if the interest earned is less than 10k

  5. manikambh says:

    As per my knowledge If the interest earned under FD exceeds Rs. 10,000 in a financial year, it would be eligible for tax deduction at source (TDS) at 10 per cent plus 3 per cent education cess, therefore a total 10.3 per cent of the interest earned.

    For example, if an investor has earned Rs. 20,000 as interest in one year, the bank would deduct Rs. 2,000 and pay only Rs. 18,000 as the amount that exceeds the limit of Rs. 10,000.

    1. Hemanth Chandra says:

      Dear Manikambh,

      Suppose the interest earned on FD is Rs.5k (<10 k), TDS will not be there…. should I pay tax on this amount ??


  6. manikambh says:

    Seems you have put 2.4 L in the fd at 8.5%. It really depends on the tax bracket you fall in. Only 10k is exempted on the earnings. If you fall in 20 or 30% tax bracket then more tax you have to pay.

    Fixed deposits will not give you more returns if you calculate onthe basis of inflation. On paper its 8.5 but in reality it would be around 6.

    If the money parked is for short term than considr investing in short term debts or fmps which are a safe bet.

    1. Hemanth Chandra says:

      Dear Manikambh,

      ‘Only 10k is exempted on the earnings’ ….. What do you mean by this….. So u mean Interest earned on FDs upto 10k is tax exempted ??

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