Is Fixed Deposit Good Investment?
Do you know that 95% of investors in India save their money through bank fixed deposits? Does it really give you good returns which can help you to build wealth over a long period of time? The answer is 'No'. Watch this video to understand how fixed deposits are eroding your wealth.
__________________________________________________________________________
Subscribe: [ Ссылка ]
__________________________________________________________________________

⌚Timestamp
00:00 is fixed deposit good investment
00:51 fixed deposit investment
01:25 fixed deposit rates in india
01:52 monthly income from fixed deposit
02:24 2020 income tax slabs in india
02:35 fixed deposit tax details
03:08 inflation rate explained
03:47 current inflation rate in india
04:12 how to calculate inflation adjusted return
04:53 fixed deposit break penalty sbi
05:11 disadvantages of fixed deposit
05:34 close fixed deposit
___________________________________________________________________________
fixed deposit investment
A survey conducted by SEBI shows that 99.9% of the investors know what is fixed deposit and how to invest in it. This high level of awareness about fixed deposit has made everyone choose this as their first preferred investment option. The next reason why fixed deposits are preferred is their low risk nature. People think that banks are safe place to park their money and fixed deposits offered by bank provide higher interest than the savings account. But let us check if fixed deposits are really safe and good choice to build your wealth.

fixed deposit rates in india
Here is the fixed deposit rates offered by popular banks in India. I have excluded the lesser known banks from this list, as not everyone would prefer to go for less known banks.
As per this list, IDFC Bank offers the highest interest rate which is 7.25%.

monthly income from fixed deposit
Lets assume you invest 1 lakh in IDFC Bank 5 year fixed deposit which offers interest rate at 7.25%. This would give you an interest income of Rs. 7250 every year. But the interest income is not tax free. This will be added to your income and will be taxed as per your income slab.

2020 income tax slabs in india
If you are a person, who can afford to invest Rs. 1 lakh in fixed deposit, then it is highly possible that your taxable income in a year is more than 5 Lakhs. As per the latest income tax slabs, if the taxable income is between 5 lakhs to 10 lakhs, then the income tax to be paid is 20%. In that case, the 20% tax on your interest income from fixed deposit is, Rs. 1450. The effective interest income after deducting this tax is Rs. 5800. This is what you actually earn! That is only 5.8% per annum on your investment.

inflation rate explained
Inflation in simple terms, is the increase in price of things that you want to buy. For example, if let us say a 10 kg of rice costs Rs.3000 today. But after 1 year, this may be sold at Rs. 3100. This increase in price is called the inflation. You can see that, Rs 3100 after 1 year has the same value as Rs. 3000. That means, if your money increased from Rs.3000 to Rs.3100 in 1 year, you still have the same money in your hands. It has now grown! Hence in any investment, you should first check, if the returns can beat this silent enemy.. Inflation! If not, you lose the money game and your enemy wins!

current inflation rate in india
Fair enough! Where can you check the inflation rate? Government of India, publishes the inflation rate periodically as Consumer Price Index (CPI). You can check this from the website maintained by Ministry of Statistics and Programme Implementation. As per this, the inflation rate as on Mar 2020 is 5.84%.

how to calculate inflation adjusted return
Let us now factor in this inflation rate into your post tax interest income received from fixed deposit. If the inflation is 5.84%, then for 1 lakh rupees, the money value lost is Rs. 5840 in 1 year. If we deduct this from the post tax interest income, then the effective income that you get is -40 rupees. That is you get negative returns. You lose money every year, instead of building your wealth. Don't get disheartened. You are not alone. 95% of the investors are in the same boat. Just like you, there are many who don't realize the impact of tax and inflation on the returns from investment.

disadvantages of fixed deposit
If an investment product is taking away money from you every year, instead of giving income to you, do you still call that a risk free or a safe investment? No. Fixed deposits are risky due to its low returns and keeping money idle in your bank account is even more risky because the interest paid is even lesser.

#saveandinvestsmartly #FD #bankfd #riskinfd #fixdeposit #investment #finance

свернуть