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
Continue reading →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…
Continue reading →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…
Continue reading →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…
Continue reading →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…
Continue reading →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?…
Continue reading →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…
Continue reading →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…
Continue reading →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…
Continue reading →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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