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POSTED BY ON June 16, 2013 9:33 am COMMENTS (4)
Dear Ashal,
I have a surplus amount of Rs 1 lakh that can be invested for a period of 1 year
Which of the below options would provide maximum benefits and how?
1- Invest 1 Lak in FD of any bank which offers close to 10.5% rate of interest (jont a/c with senior citizen)
2 – Invest 1lak/12 equal amounts monthly in a RD
3 – Invest 1 lak in the max gain a/c for the same period(rate of interest is 9.95%)
If the rate of interest is same will both options yield same benefit?
Are there any hidden charges in max gain?
Thanks,
Vinay
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Guess pre tax yield needs to be checked.
1) need to check tax effect on money lying in max gain.
2) 10.5% with senior citizen will make sense if senior citizen subject to lower tax under tax bracket. (yet am not sure any nationalized bank is offering 10.5 on senior citizen deposits also)
Dear Vinay, putting in Max Gain ‘ll yield less amount in terms of interest saving where as amount in an FD ‘ll yield higher due to farword compounding.
Parking in a Sr. citizen FD is better.
thanks
Ashal
@Ashal
will not he save more and more every next month on interest by putting 1 lacs in maxgain, as the saved interest would be credited back to max gain account? if so, is not compounding?
is not fd/rd interest subject to income tax as per the slab?
is not the interest payment on housing loan huge , i.e. much higher than 1.5 lacs p.a. (for 15 lacs or more loan a/m for 15-20 yrs) and the interest saved in maxgain would not effect tax deduction for home loan interest a/m?
i am just putting my views , but expect Ashal would reply better:
RD and FD interest is subject to tax as per your slab , even 10% rate , will reduce 10.50% to 9.45% , and for RD , it will yield less.
on other hand, crediting in Maxgain, would save your interest at rate of 9.95% of 1 lacs , but simultaneously your housing loan interest eligible for deduction from your income would go down by the same a/m.however the deductible a/m is limited to 1.5 lacs p.a. for first house loan and mostly your interest a/m in initial a/m is much more in initial years, it would not affect and your net earning would be 9.95%. moreover you would enjoyed the liquidity in case of need.