Many of us share the dream of doubling our income, often exploring various avenues to achieve this financial milestone. While it might not be feasible to double our money overnight, there are legitimate methods through which our wealth can indeed grow significantly, all without taking unnecessary risks. It's a common misconception that doubling your money requires investing in dubious or unreliable schemes; in reality, fixed deposits offer a safe and secure means to achieve this goal.
Fixed Deposit Double Scheme is a savings plan where you can double your money safely. Typically provided by banking institutions, this scheme requires depositors to invest specific sums of money for a predetermined period. The interest earned on these deposits gradually multiplies the principal amount, and upon maturity, the total amount is returned to the investor. This article will explain the ins and outs of the Fixed Deposit Double Scheme and help you understand how it can benefit your financial goals.
What is a Fixed Deposit Double Scheme?
A Fixed Deposit Double Scheme, typically offered by banks, is a special savings plan where you put a certain amount of money in for a set period. The scheme is designed to double your investment by the time it matures. It's similar to a standard fixed deposit, with a fixed timeframe and a minimum investment set by the bank.
The interest rates vary based on how long you reserve your money. The interest is added to your investment every three months, increasing your savings. When the scheme matures, you'll receive double the amount you invested in one go.
However, you can't choose the investment period or withdraw your money early in most cases. Some banks might allow early withdrawals from their FD double schemes, but they typically let you take a loan using your deposit as collateral. Usually, the minimum investment for this scheme is in the thousands.
For example, think of a Fixed Deposit Double Scheme like planting a money tree. You put 5,000 into the ground, and the bank promises it will double in 5 years. You can't dig it up before that time. As the years pass, your money tree grows and doubles your cash. So, at the end of 5 years, which means when the tenure is over, you will have ₹10,000.
Features of Fixed Deposit Double Scheme
The Fixed Deposit Double Scheme offers several notable features. They are:
Interest Rates:
This scheme provides attractive interest rates, making it a lucrative option for investors looking to double their deposits over a specific period.
Easy Account Opening:
Opening an account is a straightforward process. Individuals can choose to do it in person by visiting the bank or opt for the convenience of online account opening through the bank's portal.
Loan Against FDs:
The bank allows investors to obtain loans against their FD Double schemes. This feature provides financial flexibility during emergencies without the need to prematurely break the deposit.
Flexibility:
Investors can choose the deposit amount according to their financial capabilities. Most banks accept deposits ranging from a few thousand to lakhs, accommodating many investors.
Nomination Facility:
Depositors can nominate individuals to receive the deposit amount in case of the unexpected demise of the account holder, ensuring their investments are protected.
Premature Withdrawal Option:
While some banks allow premature withdrawals, they typically come with certain penalties.
Tax Implications:
Banks deduct TDS on the income from FD Double Schemes. The applicable TDS rate is 10% if the investor provides PAN Card details. Without PAN Card details, the bank levies a 20% TDS. The limit for TDS deduction is set at ₹40,000 for regular citizens and ₹ 50,000 for senior citizens within a financial year. It's important to consider these tax implications when investing in this scheme.
Eligibility Criteria for Fixed Deposit Double Scheme
Here are the eligibility criteria for the FD Double Scheme.
- The FD Double Scheme is open to both single and joint account holders.
- Minors are eligible to open and hold accounts under this scheme.
- Joint-stock companies have the option to participate in the FD Double Scheme.
- Educational institutions, such as schools and colleges, are eligible for this scheme.
- Clubs, partnerships, and organisations can apply for the FD Double Scheme.
- Senior citizens, as well as general citizens, are welcome to open accounts under this scheme.
Conclusion
The Fixed Deposit Double Scheme is an appealing investment choice, delivering attractive returns. Investors can trust this scheme to provide solid returns, stability, and security. Additionally, considering bank fixed deposits with the highest returns is a viable investment path. Also, you can take a loan against this scheme. In short, it's a low-risk option that promises both security and the potential for attractive returns.
What is the difference between normal FD and Double Scheme FD?
The main difference between a normal FD and a Double Scheme FD is the flexibility of the investment period. In a normal FD, the account holder can choose the investment period, and the interest earned depends on that duration. In the Double Scheme FD, the investor must deposit a fixed amount for a predetermined tenure with a constant interest rate. The scheme ensures that the investment doubles by the end of the chosen period, resulting in a higher rate of return compared to regular FDs.
Is the interest in the FD Double Scheme the same for everyone?
The interest rates for the FD Double Scheme vary among different customer categories, with senior citizens and armed forces personnel receiving higher interest rates compared to other customers.
How can I make the best use of the FD Double Scheme?
Follow the points below to make the best use of the FD Double Scheme.
- Compare interest rates from different banks to find the best scheme for your needs.
- Choose a duration aligned with your financial goals and risk tolerance.
- Carefully review the terms and conditions.
- Consider the tax implications of your investment.