How to make the most of your fixed deposits

Rakesh Makkar, President & CDO, DHFL answered your queries on fixed deposits in an online chat with Get Ahead readers on October 17.

Here is the unedited chat transcript:

Manikandan Shankar: While investing money in FD savings for longterm period I need to monitor company position on regular basis.

Rakesh Makkar: In the general interest of every investment you make, it would be advisable for you to keep a track of every instrument and company you are investing in.

salim: What are the most important things one should check before putting money in FDs?

Rakesh Makkar: Earnings, credit ratings and financial strength of the organisation are the key factors to be kept in mind before FD investments.

vishal: Why is investing in FD safer than investing in stocks and MFs?

Rakesh Makkar: As the name suggests, it is "fixed" deposits, so FDs guarantee fixed earnings. Stock market and MF investments carry the inherent risks associated with markets.

Uma Devi: Can I open FDs for 5 lacs in my son's name? He is 5 years old. How will the taxable interest calculated?

Rakesh Makkar: You can open FD in your son's name for the amount you desire. On the tax element, it shall be basis your PAN and income and tthe taxable interest will be clubbed to your income

kiran rao: What is the minimum amount to start an RD what is the minimum period & what is the interest per annum

Rakesh Makkar: You can start an RD with a minimum amount of Rs 500 and the interest would be at 10 per cent per annum.

rajiv rajput: IS OMAXE FD IS SAFE . i doesnoy find any credit ratings of them

Rakesh Makkar: To invest in FDs, it is important that the company is well credit-rated and is financially stable, with a healthy track record. It may help you to check with the company on these parameters.

Sachin Trivedi: Mr. TrivediSuppose if I invested in Bank FD which doubles my money in 7 & half yrs., whether tax will be applicable on maturity & what I should to prevent tax component?

Rakesh Makkar: On the tax query, on maturity all FD earnings are taxable if they are above Rs 10000/- in value per annum for banks. For tax exemption, you may submit Form 15 G or H as the case may be.

Manikandan Shankar: Mr. Makkar, If I have received the interest on FD's more than 2,00,000/- per year. Can i submit form 15G for Tax exemption.

Rakesh Makkar: The onus of declaration of taxable income is on the taxpayer. If you have other tax saving investments bringing down your total annual income to below the threshold of tax exemption, you can submit Form 15G.

kiran rao: Can mother issue a cheque on behalf of her son. Son is a student & he has a pancard or is it necessary to issue the cheque from son's account itself.

Rakesh Makkar: The mother can issue a cheque on behalf of her son for an FD investment even if the son has a PAN card.

Malini Devi: Mr.Makkar, What is the penalty that banks impose when we break the FD? And what is min period for RD?

Rakesh Makkar: Banks' criteria on breaking FDs is at the discretion of individual banks. Minimum period for RD investments is 6 months.

harshal tare: Respected Sir, what is systemic investment plan? Is it related to FD? Is it useful at the beginning of career?

Rakesh Makkar: Great you are thinking of investing right at the start of your career! SIPs and FDs are different investment tools.

Shinde: If I have Rs 20 lakh to invest in FDs today what kind of return will I get in say 5 years or 10 years adjusted for inflation?

Rakesh Makkar: At DHFL, for a 20 lakh investment for 7 years, your yield can go up to 14.96 per cent per annum. For the same amount, for 5 years, the yield will be at 13.36 per cent per annum. Hope this helps. I would still recommend that you visit us so that we can guide you for optimum returns. For a Rs 25 lakh investment, you earn 25 basis points extra...