Many people think fixed deposits are the best and safest way to grow money. But because of that, they often miss other ways to make more profit. First of all, some myths about FD stop investors from making smart choices. Also, with the new income tax rules for the financial year 2025-26, knowing the truth about FD can help you save more money and plan better. Therefore, it is important to understand these myths and make informed decisions to grow your wealth efficiently.
Myth 1: Fixed Deposits Always Give the Best Returns
- Interest rates are limited: Fixed deposits give fixed interest, but it may be less than inflation. Because of that, your money might lose value over time if you don’t plan properly.
- Other options may earn more: If you also invest in mutual funds or stocks, you can get better returns over a long period. Therefore, fixed deposits are not always the best choice.
- Senior citizen fixed deposit rates are higher: But even with higher rates, sometimes other investments can give more profit over the same time.
Because of that, relying only on fixed deposits may stop you from making better financial choices and growing your money faster.
Myth 2: Fixed Deposits Are 100% Risk-Free
- Inflation can reduce profit: Fixed deposits do not grow with inflation. Also, your real buying power may decrease if you invest only in fixed deposits.
- Bank risk exists: If the bank has financial problems, your deposit is safe only up to the insured limit. So, fixed deposits are not fully risk-free.
- Fixed rates may be lower than market rates: If you reinvest your money later, the new interest rate may be lower than current market rates, reducing your returns.
In addition, using a fixed deposit calculator can help you check how much you will really earn and understand the small risks involved.
Myth 3: Only Senior Citizens Benefit from Fixed Deposit
- Anyone can invest: Fixed deposits are not just for older people. Young investors can also benefit from safe returns over time.
- Flexible periods for everyone: You can choose short-term or long-term fixed deposits depending on your financial goals.
- Tax-saving fixed deposits are helpful: Even if you are under 60, 5-year tax-saving FDs can help lower your taxable income under Section 80C, so you pay less tax.
Also, Mind Farmers can guide you in choosing the best fixed deposit type based on your age and financial needs, helping you earn safely and wisely.
Myth 4: Fixed Deposits Do Not Have Any Tax Implications
- Interest is taxable: The interest you earn on fixed deposits is added to your income and taxed according to your income slab. Because of that, your actual profit can be lower than expected.
- TDS is applied by banks: Banks deduct tax at source on interest over ₹40,000, or ₹50,000 for senior citizens. So, you should plan for tax while investing.
- Tax-saving FDs reduce tax: By choosing a 5-year tax-saving fixed deposit, you can save tax and keep more money in your pocket.
Therefore, ignoring taxes can reduce the benefits of your fixed deposits. Planning carefully for 2025-26 helps you earn more.
Myth 5: Fixed Deposits Are the Only Safe Investment Option
- Other safe options exist: Government bonds, PPF, and post office schemes are also safe and give tax benefits. So, you don’t need to depend only on fixed deposits.
- Diversifying is important: If you invest only in fixed deposits, you may miss other ways to earn more. Also, your portfolio may not grow well.
- Balanced investment planning: Combining fixed deposits with moderate-risk investments can give safety and better returns at the same time.
In addition, Mind Farmers helps investors make a good plan by mixing safe and growth investments. This way, you get safety, tax benefits, and better profits.
Why Believing These Myths Can Limit Your Financial Growth?
Believing these myths can stop investors from making better choices. Because of that, they may earn less and lose opportunities to grow wealth. Fixed deposits are safe, but if you only invest in them, your money may not grow as much. Also, using a fixed deposit calculator, understanding senior citizen fixed deposit benefits, and choosing tax-saving fixed deposits can make your investment smarter. In addition, professional guidance from Mind Farmers ensures your money works well for you and helps you follow the latest tax rules for 2025-26.
Key Points:
- Fixed deposits may not always give the best returns.
- They are not fully risk-free because of inflation and bank risks.
- Everyone, not just senior citizens, can benefit.
- Interest is taxable; tax-saving FDs help reduce tax.
- Safety does not mean the only option; diversification is better.
Start planning your fixed deposits today with Mind Farmers. Use a fixed deposit calculator to see your real returns, save taxes, and grow your money safely according to the latest 2025-26 rules.