The process of wealth creation has led to institutions introducing financial instruments that would help them accomplish it. There are ways to double income, and the fixed deposit double scheme is a type of FD that could assist the depositor in doubling the amount invested in a safe and secure manner. A fixed deposit double scheme is typically offered by banking institutions and needs entities to deposit particular sums for a fixed period. The interest that has been earned on such deposits would eventually double the money, and it is then handed back to the investor at the end of the term.
Banks would typically offer Fixed deposit double schemes, and they are schemes that ask the investor to deposit a particular sum of money for a fixed period. The Scheme would then double the investment in the mentioned period. In the Scheme - when the investor deposits the money for a predetermined period, the interest will remain constant throughout, it makes sure that the money doubles by the time of the maturity of the Scheme.
A fixed deposit double scheme is the FD and also has a fixed tenure. The bank would usually define the minimum investment for this investment scheme. The interest rates would also depend on the tenure of the FD. Moreover, the rate of interest for the Scheme would vary from 4% to 8%. This interest is compounded on a quarterly basis.
The interest that is earned on the deposit is reinvested into the Scheme itself. During maturity, the investor would get back double the investment amount in a lump sum.
The investor will not have the flexibility to select the investment tenure or have the option of prematurely withdrawing. Only a few banks would allow a premature withdrawal of FD double schemes. However, the bank will allow the investor to take a loan against the deposit that has been made. The minimum investment in the money double Scheme in the bank would usually be in the thousands.
The table below shows the features of the fixed deposit double Scheme in detail:
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1) Interest Rates of the Fixed Deposit Double Scheme: |
FD Double scheme provides attractive interest rates, and it assists the investors in doubling their deposits over a certain period of time. |
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2) Easy and Simple Account Opening: |
Individuals can open the account easily without hassles, and they could either do it physically or visit the bank or open an account online through the portal. All of this can happen through the simple procedure of account opening. |
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3) Loan Against FDs: |
The bank would also offer loans against the FD Double schemes. The investor would not have to worry about breaking the deposit scheme when there is a financial crunch. |
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4) Flexibility Offered: |
The investors will have the flexibility of choosing the deposit amount according to their financial flexibility. Most of the banks would accept deposits that range from a few thousand to lakhs. |
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5) Nomination Facility: |
Depositors could also nominate individuals on their behalf, and the nominees would get the deposit amount in the case - where there is unforeseen death of the account holder. |
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6) The Option of Premature Withdrawal: |
A few banks would allow premature withdrawals, but still, these premature withdrawals could be made only with certain penalties. |
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7) The Taxes on the Scheme: |
The bank will deduct TDS on FD Double Scheme income. The bank will cut TDS if the interest income in a financial year exceeds Rs. 40,000 for regular citizens and Rs. 50,000 for senior citizens. The TDS rate is 10% when the investor discloses the PAN Card details. If not, then the TDS levied by the bank is 20%. |
Normal FD: Here, the account holder is provided the flexibility to select the period of the investment. The interest in this deposit comes down to the term that has been selected by the investor. The longer the period of investment - the higher would be the interest rates. The account holder would get the principal amount with interest at the time of maturity.
Deposit Double FD: Here, the individual will have to deposit a fixed amount of money for a predetermined tenure. The interest will remain constant over the period of time, and it makes sure that the funds invested double by the end of that period. The interest that is earned on this deposit gets reinvested in the Scheme. The rate of return on the FD double schemes is much greater than the regular FD schemes.
Generally, FD double deposits have the following eligibility criteria:
- It can be a single or joint account.
- Minors are eligible for the account.
- Joint-stock companies can opt for the Scheme.
- Educational institutions are eligible to apply for the Scheme.
- Clubs, partnerships, and more can apply for the Scheme.
- Senior citizens and general citizens can opt for the account.