What are Deposits ? Types of Deposits for customers in India
Deposits is a way of parking your money which would give you principal plus interest at the end of tenure. These deposits consist of a large chunk-able portion of savings of retail investors in India. The reason behind is guaranteed returns and safe investment. But there is a tax which is to be paid in these deposits. In India, there are two places where deposits can be made.
In Bank Deposit, people invest in Banks via Fixed Deposit, Recurring Deposit, and Tax-Free Deposit. These deposits are considered to be safe and chances of default are very very less in India and it is none of top public and private sector banks.
Fixed Deposit - In this, one needs to invest only once for a fixed duration with a fixed interest rate.
Recurring Deposit - In this, one needs to invest every month and the duration and interest rate are fixed beforehand.
Tax-Free Deposit - In this you get benefit under Sec 80C of no tax on principal. Generally, the duration is 5 years with the pre-decided interest rate.
Many companies come out with corporate deposits which give us details about the rate of interest and tenure. One can enter into these deposits but it's always sure that you will get those returns which they promised. So one should examine carefully and then enter into these deposits.
Compounding on deposits is generally on an annual basis for both the deposits, but it can be for small duration also such as monthly, quarterly, half-yearly.
- Bank Deposits
- Corporate Deposit
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| Deposits : A Safe way to invest |
Bank Deposit
In Bank Deposit, people invest in Banks via Fixed Deposit, Recurring Deposit, and Tax-Free Deposit. These deposits are considered to be safe and chances of default are very very less in India and it is none of top public and private sector banks.
Fixed Deposit - In this, one needs to invest only once for a fixed duration with a fixed interest rate.
Recurring Deposit - In this, one needs to invest every month and the duration and interest rate are fixed beforehand.
Tax-Free Deposit - In this you get benefit under Sec 80C of no tax on principal. Generally, the duration is 5 years with the pre-decided interest rate.
Corporate Deposits
Many companies come out with corporate deposits which give us details about the rate of interest and tenure. One can enter into these deposits but it's always sure that you will get those returns which they promised. So one should examine carefully and then enter into these deposits.
Compounding of Bank & Corporate Deposits
Compounding on deposits is generally on an annual basis for both the deposits, but it can be for small duration also such as monthly, quarterly, half-yearly.
What are Deposits ? Types of Deposits for customers in India
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Reviewed by Unknown
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