All of us have enjoyed the benefits of proactive actions made in the past. Continuing this cycle, taking the right steps today can greatly benefit the unforeseen future, especially when it comes to meeting our financial goals. The rate at which inflation is increasing certainly makes us worry. Owning a house, funding our child’s education or weddings, spending quality time with the family on holidays overseas – all these dreams may be fulfilled with the right financial planning and execution.
One way to work towards sound financial planning is by investing in term deposits,an asset class that gives a handsome return with minimum risk.Indian banks offer a variety of these assets, as shown below.
1) Regular Term Deposit:Under this type, you may decide when you need the interest on the principal amount;it could be monthly, quarterly or when the deposit matures. This deposit provides a very favorable rate of interest. You may select a tenure of your choice, with options ranging from 7 days to 10 years.
2) Senior Citizen Deposit:A resident Indian citizen who is 60 years and above qualifies as a senior citizen.Financial security at this stage matters the most. Senior citizen deposits provide an attractive rate of interest on principal amount. By making these deposits, you will be able to fulfill dreams like taking up a hobby, vacationing at your favorite destinations and giving valuable gifts to your grandchildren.
3) Recurring Deposit:Allocate a part of your income towards a recurring deposit every month. What may seem like a small amount every month may turn into precious capital in a few years. This deposit can help you to save smartly while also earning interest. The best way is to get started with a small amount and eventually increase it when you feel able. TDS is not applicable on these deposits.
4) Sweep-in Facility: This facility enables you to link your savings or current account with existing term deposits.In case you issue a cheque and do not have the required liquidity in your account then the shortfall amount will be taken from the deposit made with the bank. This facility gives you a higher interest rate as compared to savings or current accounts.
5) Tax-Saving Deposits:If you want to earn an attractive interest rate by investing your money for a period of 5 to 10 years then invest in these deposits. By doing this, you may also save a good amount of tax which is an indirect way of earning.
6) Ace Deposits: If you are willing to take a little risk and earn a higher interest rate then this product could prove to be a rewarding investment for you. An ace deposit routes the monthly interest on your term deposit to an equity mutual fund in the form an SIP. All you have to do is give standing instructions to your banker.
Kotak Mahindra Bank offers all of the above options at attractive term deposit interest rates. Choose the deposit of your choice today to secure your tomorrow!
Author Bio: Anupama Sughosh is an independent finance blogger who loves writing about the rise and fall in the world of finance, banking, general industry trends and corporate sustainability. She holds a rich experience of working with corporates such as KPMG as well as institutions such as TISS, her articles share insights from the individual and the corporate perspective.
Whatever mode of deposit one may choose, the most important thing to adhere is always to have the deposit in joint names, i.e, self and one of the close relatives (like wife, son, daughter etc.) and opting for nomination facility ( in the name of persons other than the joint depositor). PLEASE DO ENSURE THAT ALL YOUR INSTRUCTIONS ARE CARRIED OUT BY YOUR BANKER, else at the time of maturity/any unfortunate incident, your hard earned money would not reach your legal heirs without any hassles. It is prudent to take a Xerox copy of your deposit application and store it along with the deposit receipt, because it is not uncommon, nowadays, the old records at the Banks are not that easily traceable, despite so many technological developments.
SIP is good option.