What is a Fixed Deposit (FD) and why should I invest?+
A Fixed Deposit (FD) is a safe investment option where you deposit a lump sum for a fixed tenure at a guaranteed interest rate. Unlike market-linked instruments, FDs provide assured returns, higher than savings accounts, and protect your money from volatility.
Is it safe to invest in Fixed Deposits through Karat Wealth?+
Yes, investing in FDs via Karat Wealth is completely safe. All deposits are placed with RBI-regulated banks and NBFCs. Bank FDs are insured by RBI’s DICGC up to ₹5 lakh per depositor, ensuring extra protection.
What is DICGC insurance on Fixed Deposits?+
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of RBI, insures bank deposits (including FDs) up to ₹5 lakh per account holder, per bank. This ensures your deposits are protected even if the bank faces financial issues.
What is the minimum and maximum amount I can invest in an FD?+
You can start investing in Fixed Deposits with as little as ₹1,000. The maximum investment depends on the bank or NBFC’s policies, allowing flexibility for small and large investors.
Who can invest in Fixed Deposits via Karat Wealth?
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Indian residents with valid KYC documents (PAN and Aadhaar) can invest. Currently, FDs are not available for NRIs, minors, or non-tax residents of India.
How are Fixed Deposits taxed?
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Interest earned on FDs is taxable as per your income tax slab. TDS is deducted if annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). You must declare FD interest while filing your ITR.
Can I make a premature withdrawal of my FD?+
Yes, you can withdraw your FD before maturity after the lock-in period. However, banks/NBFCs may levy a small penalty, and interest will be paid only for the completed tenure at the applicable rate.
What happens when my FD matures?
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On maturity, your FD amount along with interest is directly credited to your linked payout bank account. You can also choose to reinvest in a new FD through the Karat Wealth app.
How do I book a Fixed Deposit through Karat Wealth?+
Simply complete your KYC (using PAN and Aadhaar), link your bank account, select your preferred FD scheme, and make the payment. Your FD is booked instantly, and you receive an FD advice directly from the bank.
Do senior citizens get higher interest rates on FDs?+
Yes, most banks and NBFCs offer senior citizens an additional 0.25%–0.50% interest on Fixed Deposits, making it an attractive and safe investment for retirees.
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