Apart from interest, you get these 5 big benefits in FD, 90 percent of people are not aware of this

BREAKING NEWS (Bureau). Everyone wants to increase their income and in such a situation investors look for low risk and high return options for investment. 

If you are also looking for such an option then this news is useful for you. Actually, when it comes to investment, most people talk about FD (Fixed Deposit). FD is given importance because there you get guaranteed returns. Many people also advise investing money in mutual funds or other places instead of making FD.

This is so that more returns can be obtained. Whereas returns are not guaranteed at other places. So if you want guaranteed returns on your money then FD is a better option. Not only this, there are many benefits of doing FD. So while doing FD, do not just look at the interest (FD Rate) you get on it, but also keep other things in mind.

1- Loan or overdraft facility on FD

Many people do not know that they can easily get a loan from the bank on the FD they make. Some banks also provide overdraft facility on that basis. FD is like a guarantee that if you are unable to repay the loan, then the loan amount will be covered by your FD. So now if you compare FD with any other investment, then also keep in mind that you can get a loan on FD.

2- Insurance cover is available on FD

If you have made an FD in a bank, then you get insurance coverage of Deposit Insurance and Credit Guarantee Corporation (DICGC) on it. 

If your bank defaults or goes bankrupt, then you will get up to Rs 5 lakh under this insurance cover, which will include both principal and interest. That means not only your returns will be guaranteed, but you will also be guaranteed to get back up to Rs 5 lakh.

3- Benefit of free life insurance

There are many banks that give an additional benefit of free life insurance to those who make FDs. Banks give such an offer so that they can attract more and more people for FD. Under this, banks offer life insurance equal to the amount of fixed deposit (FD) to their customers. 

However, there is also an age limit for this. If seen, banks give life insurance to customers after calculating their risk, which is a profitable deal.

4- Tax benefits

If you make a fixed deposit for 5 years or more, then you can claim tax exemption on it under Section 80C of the Income Tax Act 1961. Under this, you can get tax exemption up to Rs 1.5 lakh in a year. 

However, if you make an FD for less than 5 years, then you will have to pay tax. If the interest received from all the banks in a year is more than Rs 40 thousand, then tax will also be levied on it.

5- Guaranteed Returns

The most special thing about FD is that it gives you guaranteed returns. That is, if you are planning for 5 years or 10 years or any number of years later, then in FD you know for sure how much money you will get on maturity. 

This is because FD gives fixed returns. On the other hand, in investments like mutual funds, NPS, ELLS, the returns increase or decrease every year and depend on the movement of the stock market.