If you’re fond of giving to charity, then there is a good chance you want to maximize your tax deductible donation Singapore. But that’s not the only way to reduce your tax rates. Building adequate funds over time is no longer a hassle when you invest in a tax-saving FD. And this is easy to see why since Tax Saving Fixed Deposit scheme boasts numerous features to ensure you reap maximum benefits. Below are the key features that make a Tax Saving FD worth your attention.
Tax Exemption
Tax exemption is undeniably one of the best-selling points of a tax-saving Fixed Deposit. Any investment you make is eligible for tax exemption under Section 80C of the IT Act, 1961. That is good news since it is the ideal way to grow your corpus over the long term without going through a lot.
Flexible Interest Pay-Outs
If you invest in a tax-saving FD account, be rest assured you receive flexible interest pay-outs. Actually, you can choose different pay-outs. By this, we are merely implying monthly pay-outs, quarterly pay-outs, or the freedom to reinvest in your principal amount.
Other features of a tax-saving Fixed Deposit include no auto-renewal option, no premature withdrawals, a lock-in period, and taxable interest, to mention a few. Remember, the interest rates will always vary from one bank to the other. As for the Tax Saving FD, you can choose between a single mode or a joint mode.
Notable Benefits of A Tax Saving FD
We can never conclude without talking about the notable benefits of a Tax Saving FD. Luckily, there is more to leveraging a Tax Saving FD than it sounds.
Under this scheme, you benefit from a higher return on your deposit amount, unlike the case with savings accounts. And since you’re making a lump sum deposit, you won’t take a toll on your finances. No wonder it is the ideal option for individuals with sizable surplus savings.
If you think the benefits of a tax-saving FD stop at that, you may be in for a rude shock. That is because is a secure investment option since market fluctuations never affect the interest rates. Furthermore, it allows for a minimum lock-in period of five years, but you can choose to extend it if you so desire.