Fixed Deposit News: Those who invest more than Rs 5 lakh in bank FD should be careful, know the rules before investing

News, Digital Desk- (FD Benefits) Even today, Fixed Deposit (FD) is considered a reliable and safe investment option. Despite many new schemes, financial experts recommend including it in the portfolio. Your money is safe in FD and it gives guaranteed returns, which makes it an attractive option for investors.

But have you ever wondered what happens to your FD or the money deposited in your account if your bank collapses? There are many things that the bank does not tell you about. Know about this and all the other benefits you get on FD here-

Amount up to 5 lakhs remains safe-

If your bank goes bankrupt, your fixed deposit (FD) gets an insurance cover of up to ₹5 lakh. Very few people know this. This cover is available under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. Earlier this amount was Rs 1 lakh, which has now been increased to Rs 5 lakh, which is a big relief for the depositors.

If your deposit in a bank is more than Rs 5 lakh and the bank goes bankrupt, you will still get a maximum of Rs 5 lakh back from the Deposit Insurance and Credit Guarantee Corporation (DICGC). 

For example, if you have made an FD of Rs 10 lakh and the bank collapses, you will get only Rs 5 lakh and the remaining Rs 5 lakh will be lost.

Also know about these benefits of FD-

- Whether you make an FD for one year, 5 years or 10 years, you know how much money you will get at the time of maturity. This is the reason why FD is considered an investment with guaranteed return.

- You can keep the tenure of FD according to your need. In many banks, you are given the option of FD from 7 days to 10 years. You also get interest on it according to the tenure. Apart from this, you get the benefit of compounding interest on FD, that is, you not only get interest on the amount invested, but also interest on interest.

- If you suddenly need money, you can take a loan against your FD without breaking it. Banks give 90 to 95 percent of the total amount of FD as loan. Generally, the interest on loan against FD is one percent more than that on FD. 

- If you make an FD for 5 years or more, then you get a chance to claim tax exemption under 80C. If you make an FD for less than 5 years, then you will have to pay tax.  

- Most banks offer 0.50% more interest to senior citizens than the general public. 'Super Senior Citizens' above 80 years of age get an additional interest of 0.25%. Thus, this is a profitable investment option for senior citizens.