Fixed Deposits / Bonds
Fixed Deposits / Bonds
Article Summary…..
Fixed Deposits / Bonds
These are one of the favourite investments of individuals of India. These are considered to be one of the safest investments, although a lot need to be checked before buying this product from institutions other than bank and highly secured institutions. These can be taken from
| Fixed Deposits | Bonds |
|---|---|
| ◿ Banks | ◿ Banks |
| ◿ Post Office | ◿ Financial Institutions |
| ◿ Financial institutions | ◿ Non Financial Institutions |
| ◿Non Financial Institutions |
What are the benefits of FD and Bonds?
FD gives you safer returns if taken from bank or safe institutions. It may give you higher returns if you have taken from risky institution. There can be secured bonds known as debentures, these are more secured than bonds.
Is there any Tax benefit?
There is no tax benefit attached with this product. Only Tax saving fixed deposit is there to give you tax benefit of 1 lac with lock in period of 5 years. The returns from the scheme are taxable in the hands of individuals.
There are some Tax free bonds in the market which help you in maintaining your purchasing power. These bonds give you Tax free returns.
Is it suitable for individuals?
No plan is good or bad, only the situation of individual decides whether he or she should buy the product or not.
You should not buy any plan without planning your need at retirement. This plan gives you money for expenses and hardly adds any value to your purchasing power. In general the real return after Tax and inflation is negative for individuals. If you need to invest for a very short period, these can give you good results.
The answer is comprehensive customized life planning, this makes you plan your life with approximately all the domains of life with long horizon.
To carry out all your responsibilities you need to plan your life.
| Your Investment in Rs | Annual Return 9% | Income Tax | Inflation | Return Amount | Real Return |
|---|---|---|---|---|---|
| 100000 | 9000 | Nil | 8% | 1000 | 0.93% |
| 100000 | 9000 | 10.3% | 8% | 73 | 0.07% |
| 100000 | 9000 | 20.6% | 8% | -854 | -0.79% |
| 100000 | 9000 | 30.9% | 8% | -1754 | -1.62% |
