Finance Minister Piyush Goyal presented the Interim Budget 2019 today, amidst much speculation and debate. However, the Budget announcements look promising for the rural sector of the economy, the investors, and the salaried. One of the key takeaways of the budget was the hike the government proposed for TDS deduction limit on interest earnings for bank and post office deposits.
Unlike now, when you must pay TDS for earnings above Rs. 10,000, and now you will only have to pay TDS on your interest earnings above Rs. 40,000. This spells great news for investors looking for assured returns in the high interest rate scenario.
Take a look at how this and other factors will increase demand for FDs in 2019-20.
The year 2018 saw a number of rate hikes in terms of repo rate revisions, owing to which, banks increased the interest rate on loans. However, as an investor, this came as a blessing to you, as in order to balance the hikes, banks and companies started offering higher interest rates on deposits.
Experts believe that once the external benchmark system gets activated in 1st April 2019, not much of an increase in interest rates can be expected. With promise of no further hikes in FD interest rates, it is indeed the right time for you to utilise the best rate offerings.
It is needless to say that in comparison to other non-market linked investments, FDs are offering one of the best interest rates at present. Also, in comparison to other long-term investment options that may fetch high interest over time, FDs offer you higher interest earnings courtesy special tenor plans.
NBFCs set their interest rates, independent of the RBI and were already offering higher interest rates in comparison to banks. Now with the rate revisions, they have also revised their existing FD interest rates, attracting more investors. In case you too want to gain higher FD interest rates on your investments, you should choose to invest with issuers like Bajaj Finance.
Here, you can start an investment with just Rs. 25,000 and choose the frequency of your payouts, as per your convenience. Moreover, you can benefit from a lucrative interest rate of 8.75%, which goes up to 9.10% for senior citizens. Bajaj Finance FD’s also has the highest safety ratings, with ICRA’s MAAA (stable) rating and CRISIL’s FAAA/Stable rating, which makes these offerings a truly secure option for your hard-earned savings.
If you take into consideration the recent Union Budget announcements pertaining to the re-shuffle of tax slabs, then you will certainly stand to benefit from your FD investments in more ways than one. This is because the government has proposed that now individuals earning up to Rs. 5 lakh in a year will be exempt from paying any tax.
So, this is a straight double in comparison to the existing Rs. 2.5 lakh minimum income threshold. Even though you will have to pay cess and surcharge on your tax dues, you can still stand to save more from your earnings.
Thanks to this and the fixed deposit TDS threshold, you will certainly benefit more this year as an investor by choosing FDs.
With guaranteed high returns on your investment and the revision in TDS deduction threshold, it is now time for you to ladder your FDs according to your goals. Create a forward-looking financial plan and build a diversified portfolio now to have a corpus that stands the test of time.