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Category: Fixed deposits

When to use a bank overdraft account?

September 25, 2020 / M. Pattabiraman / @pattufreefincal

An overdraft account is a type of credit facility offered by a bank in which one can overdraw funds, for example, write a cheque for Rs. one lakh when our account balance is zero. In this article, we discuss when it should be used.

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Tamil Nadu Power Finance Fixed Deposits: Are you aware of risks?

June 23, 2020 / M. Pattabiraman / @pattufreefincal / 6 Comments

When bank fixed deposits decreases, as usual, senior citizens ignore credit risk and chase after “high return corporate FDs”. The latest craze, Tamil Nadu Power Finance Fixed Deposit offering up to 9.11% return on a 36 to 60-month deposit for senior citizens. Here is what you need to know about these allegedly “Absolute Safety &…

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Tax on Fixed Deposits: Should we pay each year or on maturity?

December 5, 2019 / M. Pattabiraman / @pattufreefincal / 4 Comments

Should we pay tax on fixed deposits each year or only on maturity? What does the law say? What are the options for the investor? Can we pay on maturity even if there is a tax deduction at source? Let us find out

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Small Finance Bank Deposits: Are they safe? Can I invest? Plus other FAQ

March 16, 2019 / M. Pattabiraman / @pattufreefincal / 8 Comments

Here is a FAQ on Small Finance Banks: Are they safe? Can I invest in their fixed deposits? How are they protected? What are the safeguards? What are these banks for? Let us find out. A FAQ on Small Finance Banks What are they? Small Finance Banks are Banks licensed by RBI under section 22 of…

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What happens if my bank fails? All about Deposit insurance (DICGC)

March 14, 2019 / M. Pattabiraman / @pattufreefincal / 7 Comments

What if my bank goes bust and does not repay my deposit? We all know that the money has insurance of only up to one lakh. How does this work? Who will step in when a bank fails and how do we get back the money? In this age of small finance banks, knowledge about…

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Reducing Tax With Partial Mutual Fund Withdrawals: Examples + Calculator

October 24, 2017 / M. Pattabiraman / @pattufreefincal / 6 Comments

There are times in life when you require money for a need in stages. The most common example is monthly income. Those who do not have much money to play with, cannot take risks and must rely on interest income which is always taxable as per slab. On the other hand, those who have some…

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Fixed Deposits: Annual Yield vs. Annual Interest

October 18, 2013 / M. Pattabiraman / @pattufreefincal / 28 Comments

The difference between annual yield and annual interest and how it can be used to misrepresent gains from fixed deposits is discussed. Let us face it, most investors are confused with the two percentages associated with a fixed deposit: annual interest and annual yield. Most people make the common mistake of assuming that the yield…

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Fixed Deposit Calculators III: How many days are there in a year?

August 31, 2013 / M. Pattabiraman / @pattufreefincal / 4 Comments

How many days are there in a year?  According to Google it is 365.242 days. If I hold one year fixed deposits and determine maturity values using 365.242 days as the tenure, will my calculation match the maturity values listed in the bank statement? Unlikely. Perhaps I should round it off and use 365 days?…

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Updated Fixed Deposit Calculators

August 21, 2013 / M. Pattabiraman / @pattufreefincal

Here are updated versions of three fixed deposit calculators. FD calculator for investment tenure in months and years (tax to paid each FY and advance tax liability) minor bug fixed FD calculator for investment tenure in days (tax to paid each FY and advance tax liability) macro button added to stop and start calculations for…

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Debt Mutual Fund vs. Fixed Deposit Comparator – Version II

July 29, 2013 / M. Pattabiraman / @pattufreefincal / 42 Comments

There are many articles on the web that talk about the difference in the way debt mutual funds and fixed deposits are taxed. Almost all of them (including the ones by self-proclaimed beacons of financial literacy) talk about post-tax returns typically over 3-5 year periods. To my knowledge there is only one article, written by…

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Calculator Update: Variable/flexible Recurring Deposit Calculator

July 6, 2013 / M. Pattabiraman / @pattufreefincal / 16 Comments

Note: The variable RD calculator gives the total post-tax interest. I have assumed that only the variable payments are subject to a penalty. That is if a variable payment is not made before a certain date (reader Srinivas says it is 10th in his case) then interest on the variable payment for that month will…

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Fixed Deposit Calculator: Income Clubbing Headache

June 20, 2013 / M. Pattabiraman / @pattufreefincal / 12 Comments

It is a terrible idea to open a fixed deposit in your spouse’s name with your money. In general, this arrangement is a terrible idea with any taxable instrument. Terrible, because of the complex way in which the interest income will be taxed. Of course this is applicable only if you are a law abiding…

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Comprehensive Fixed Deposit Calculator – I: Total and Advance Tax Liability

June 10, 2013 / M. Pattabiraman / @pattufreefincal / 13 Comments

If you are holding fixed deposits, you could use this calculator to compute: tax you need to pay each financial year after accounting for TDS advance tax instalments to be paid (if applicable) This calculator is a spin-off my recurring deposit calculator which was featured in OneMint. The calculator was requested by Anshu and is…

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Calculator to Compare Lump Sum Investment Returns

May 2, 2013 / M. Pattabiraman / @pattufreefincal / 10 Comments

The following appeared as a guest post in BasuNivesh Learn…Invest…Succeed !!! on May 1st 2013. The blog is authored by Basavaraj Tonagatti a Certified Financial Planner from Bangalore. His posts are honest, sincere and balanced. All of us would like to get better returns on our investments. However with returns or capital gain comes knocking…

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Advantages of debt funds over fixed deposits: Calculate and Assess

March 13, 2013 / M. Pattabiraman / @pattufreefincal / 44 Comments

A few days ago Subra called me to discuss a calculator idea: a comparison between a lumpsum investment made in a bank fixed deposit and a debt fund, like a income fund, over a period of several years. Interest from a bank FD has to be declared each year and will be taxed according to…

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