1)
(ii)
Where do you want to deposit your income? Why?
Answers
Explanation:
we deposit our income in income tax center .
Primarily, banks offer two kinds of deposit accounts. These are demand deposits like current/saving account and term deposits like fixed or recurring deposits. When you open a deposit account in a bank, you become an account holder or a depositor.
The deposit rates on saving account keeps changing based on RBI’s revision of policy rates. Banks offer lower interest rates on saving account as compared to term deposits. It is because of this reason, investors opt for term deposit accounts.
For example, you hold a fixed deposit (FD) of Rs 10,000 for a period of five years with the bank. In return, the bank pays you an interest at the rate of 10% per annum.
Keeping your money in a bank account is wiser than stacking it under your mattress. It is a much more secure way and you can withdraw your money whenever you need it. In fact, you may even transfer it to another account using a secure gateway.
In case you are an FD junkie, do not concentrate all your investments in a single bank. You need to know that bank FDs aren’t as secure as you think. In case of bank default, you will be eligible for a maximum compensation of Rs 1 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC). This happens even though you held deposits of amount higher than Rs 1 lakh.
If you have Rs 5 Lakh to invest, then hold FDs of Rs 1 lakh in five banks rather than Rs 5 lakh in a single bank.
In case you need your money before maturity, bank will impose a penalty. If the penalty is 1%, then you may lose more than you earned during the tenure.
Interest earned is clubbed in your income
FDs aren’t as tax-efficient as mutual funds and equities. The interest earned on FDs will be clubbed in your total income and taxed as per your income slab. Suppose you create an FD in the name of your spouse. The money deployed to create FD won’t attract tax but the interest earned will form part of your income and be taxed.
Equity-Linked Saving Scheme (ELSS) can be a tax-efficient way to invest and grow wealth. It has the shortest lock-in period. Moreover, it offers higher returns than FD.
RD or Recurring Deposits are an investment tool which allows investors to make regular monthly payments and save money for the long term. Investors can choose the tenure of the deposit and the minimum monthly payment they wish to make according to their convenience. RD schemes are generally more flexible than FD schemes and are generally preferred by those who want to start an account for the purpose of saving money and building a rainy-day fund
Recurring deposits are the ideal products to opt for when planning short-term goals you wish to realize in the next 1-3 yrs. These may include saving up for a downpayment of your new home, paying for your children’s education, renovating your home, saving up for a degree abroad and so on
Recurring deposits are very easy to open. Most banks in the country have this facility. But, they do come with some hidden charges. For instance, if you were to withdraw the amount in the RD account before the tenure finishes, you may have to pay certain charges. It is important to know these rules before you start an RD account so you can be better prepared for the future.
Current Account
Salary Based Savings Account: Many corporations tie up with banks to help their employees open a salaried account. This helps the company as the task of disbursing the monthly salaries becomes easier.
Savings Accounts for Senior Citizens: These accounts are created exclusively for senior citizens with added privileges and benefits.
Savings Accounts for Children and Minors: These accounts are created exclusively for children and minors under the guardianship of their parents.
Exclusive Benefits Accounts for Women: As the name suggests, this is an account exclusively for female customers and entrepreneurs. It is a relatively new offering from some banks and comes with added benefits.
Zero Balance Savings Account: A savings account where the customer need not maintain a minimum balance for the account to remain functional.
Make Small Investments for Bigger Returns
of what you know bank as a safe storage apart from robbery