Yes it’s an easy solution. No brainer. The sad part is they keep taxing even senior citizens on FD. I know few people who are 80+ still in tax terrorism.
How is that possible to remove?? Unless they give higher rates which can beat inflation people won't be attracted to fd. Inflation at 7% and Fd rate at 7.5%. who wants 0.5% return 😂😂
Mr. Basu is absolutely right. FD should be taxed only on withdrawal. I always thought this is obvious and rational till my CA told me the government of India doesn't think so. It makes no sense to tax me on something which I have not yet gained in hand and am in no position to capitalise. That's like prospective taxation. Imagine getting taxed on your property in the same way arguing that the value of your real estate is appreciating every year even if you are not yet selling it. It's ridiculous.
@@rsv1503 The bank will deduct TDS every quarter. At the end of the FY, you file it under income from interest and its taxed as per your slab. Having your TDS deducted doesn't automatically imply that you forfeit that amount. You may receive a refund at the end of the year depending on your slab.
So after TDS, from remaining salary we create FD in bank Then TDS deducted on that "total existing fd amount" also Without even fd maturity Or Tax deducted only on " interest" that added in fd account?
Bhai unko gaaand marna hei middle class ka at the behest of taking poor people care so that they can give freebies..for vote. .also note that political donation is 100% exempt from tax. Imagine 😂😂😂
Till the government doesn't come out & publicly say that "now Mutual Fund Sahi Nahi Hai!", I will continue investing in Equity Mutual Funds. I will not make the mistake of investing in Bank FDs just because Banks need money to loan it out to others. I will invest in Bank FDs if & when the interest rates rise to above 9.5% per annum. Till then Equity Mutual Fund only Sahi Hai!😊
@@two8915 BJP increased it from 1 lakh to 5 lakh and changed the rules so that depositors will get money immediately. Previously depositors were getting money after 5/10 years.
Where’s the incentive for common man to put money in bank deposits…low returns, less than inflation, taxed heavily then it gets lent to useless corporates they fail and written off . Rather people are willing to take risks with mutual funds, equities
I am a senior citizen staying in a small town in Odisha. I have a FD in a nationalized public sector bank in Asansol (WB). In May this year, I contacted the branch office of the bank in my town for details of my tax deductions pertaining to my FD for filing my IT Returns. I was promptly told to contact my original bank in Asansol. I sent them email requests, but got no response. Finally, I went to my bank in Asansol by changing two trains, only to be told to come back in June ! Had I invested my money in a mutual fund or even in LIC, I would have been spared this harassment.
Why don't you check your Income Tax portal Annual Information Statement and TRACES Statement which is updated by Bank before 31st May, of evert year for the previous year.
We deposit in banks and they hand it to crooks like Adani and other businessmen and politicians and end up saddled with huge NPAs . FD interest rates are pathetic and we have to again pay tax . It is wonder that people give money to banks . FM should address key problems if she expects people will handover their hard-earned money to inefficient and arrogant banks . Let's not talk about interest Rates now .
It would really help if govt stops taxing accrued interest. Taxes should only be applicable only when interest comes into savings/current account from FD.
Moneylife failed to notice several things in article " bank fd sahi hai". 1) by imposing 20% , 12.5% , 0.2% tax rates on equity. It wont drive away investors from investing in stock equity markets. 2) By putting a litigation that if u choose new regime tax system for two consequtive years, you cant get back to old tax regime. (old regime gives 80c advantage like e.g "5 year tax savings fd". New regime discourages people to save. 3) By introducing ELSS for 3 years against 5 year tax savings fd. How can expect citizens to invest in FD. 4) And any incentive for tax savings bank FD under 80c? . Only 1.5 lakhs. It is not increased to some 3 Lakhs. 5) TDS factor in bank FD. E.g You open a FD of 1 Lakh for 1 year @ 5% interest earning 5000 approx. Then 30% tds it comes to 3500 rupees only. So net interest is only 3.5% interest. Now tell me why you put title as " FD sahi hai". " FD sahi nahi". 6) govt should give tax inventives on fd returns. Like no tds tax upto 1 lakh. E.g you have fd of 1 crore which gives interest of 5 lakh approx. Then 1 lakh is exemp ( taz free & tax exempt). Tds should be applicable only to remaining 4 lakhs in this case. 7) also tax savings 5 year fd is ought to be tds free. If i open a 1.5 lakh fd for 5 years and after 5 year year suppose i get 35k interest then entire 35k should be tax free. 8) also yearly deduction of tds as accured interest for 5 year fd. This accured interest is also shown as " income from other sources". Theae things should be fixed. 9) corp fd's like shriram & muttu are giving higher returns. ( note: all points written above are reasonable and aren't exxagerated. ** Collected points from other users 9) 12.5% vs 30% rate 10) fd rate for 5 years should be 9% so to get 50% retuns in 5 years. 10) banks themselves are hard sellung MF's. Treating FD's as burden. And FD customers as buden. 11) insurance to increase upto 1 crore. 12) long term incentive of 1 lakh to even FD's 13) debt mf giving 10% returns.
Very insightful. If the bank FDs become similar to NSC/KVP, i.e. no TDS then I think bank deposits will grow. And if the FDs are taxed only on redemption then banks will see huge surge of deposits and the issue will be resolved.
Well articulated video. No one brought banks to this situation. It’s all sell inflicted problems by banks. First they should stop harassing their employees to sell MFs and ULIPs.
Income tax policies on interest income is the main culprit for low FD in bank. Govt always hardened the tax policies for general salaried people. Govt should also focus on to minimize revenue expenditure ( non-productive expenditure).
IN feb 2023 almost 35000 cr lying in banks were taken by govt instead of giving it to descendents of the account holders. Also if a loan is pending recovery people pester family members too , but incase of credit bank balance or fd are not returned to rightful owners , this is gross injustice for bank depositors who forget about their fd , balance etc or pass away with family members not knowing about the same .
The main reason for the investor is that they don't trust the bank. Any bank can fail and govt only give insurance upto 5 lac. Whereas in MF that kind of risk in not there...maybe the worst case the return may be less but definitely it will be better than FD returns. Worst case, we will lose on the time but your investment is safe. Also, FD returns are taxed as per normal tax slabs whereas MF return for long term capital (over 1 year) is taxed at 12.5%. The solution is :- 1. Give 100% insurance on FD investment (atleast FD principals). 2. TAX FD return at 12.5% like MF. 3. Freeze minimum FD return @7% You may see increase in FD deposit if you implement the above.
Trend has changed and it is not going to revert until some strong reason comes. My father put all his saving in FD. That was different time and the interest was upto 12 percent in FD once upon the time. Myself put all my savings in equity. To make FD attractive govt has to do some realistic thing like make only 10 percent tax on FD. If I put my money in FD , i have to pay 30 percent tax , because of that FD is not good for me. Net return is also very low in FD. In equity after so much ups and down the net return is always good if you invest money in good and decent companies. Just saying FD sahi hai will not make FD good for me. Govt need to prove it. In FD i have to pay tax on interest earned every year even I lock FD for 5 years.In equities I need to pay tax only in the year when i sell and took profit. I am ok with the risk which comes in equities but i am not ok with the return in the FD. FD might be 'sahi hai' for Govt and Bank but not for me.
Govt should be more honest in reporting the inflation to even consider FD rates. With sky high inflation at retail, nobody will trust the official numbers and willing to take more risk.
FM is mainly responsible for the attrition in bank deposits because of regressive taxation policies proposed in 2024 budget. 1.Banks are charging for each and every service provided by them. 2. Their customer service is horrible. 3. Even if you deposit cash, then you get a notice from IT. So why should a customer put money in banks and entertain unwanted problems. 4. All our hard earned money is taxed, which leaves little money in the hands of customers. 5.Banks may collapse at any time. So people keeping money at home.
I will invest in bank deposit only if i don't have to pay tax on interest that I haven't even received every year. Paying at the end of the tenure makes sense, but I don't even have the money but I need to pay tax on it. If banks provide an option to deduct 30% interest that is also fine, atleast I don't have to arrange that money.
@@jsrblrkannan4119 that TDS is only 10%. For someone in 30% tax slab, if they want to keep lakhs of rupees in FD then every year they will have to account the money to pay the tax on the interest amount. If they don't pay it before the advance tax deadline, then the added penalty too.
In a country where banks are lending risky money - 95% loan sanction for homes, 90% cars and 70% mobile phones are on loans. Why would someone deposit in banks 😂
You forgot about corporate loans running into crores later being written off.Recently PSU banks loans wrote off to the extent of ₹15 lakh crores.Not only that the FM is talking nastily being the blue eyed girl of Modi that written off is not waiving off. Any knowledgeable banker knows that she is fooling the common man by that. Sorry state of affairs. If you assume 10% on the write off amount of ₹15 lakh crores it comes out to ₹1.5 lakh crores interest alone per year. But nobody is talking about it including you , Debashish ji.
Debasis sir is spot on, bank officials mis-selling insurance happens in large and even smaller banks, attacking debt mf with taxes is shooting on foot (over a period of time people will just go global and invest due to such yearly changing policies), bank officials should not be allowed to sell mld,insurance etc then all deposits will be back in bank.
Finance ministry can deposit the PF money into PSU banks and increase the age limit from 58 years to 60 , they should also give higher returns in FDs by 0.25 % for more than 3 year lock in
Misselling is the biggest culprit. Never ever in the last 10 years has any pvt bank let a person open a simple FD without making him go through all the insurance force selling attempts…
If bank can give 12 to 13 percent interest against FD then there can be chances young people may deposit spare money.Similarly bank can increase interest in loans.
I disagree that funds kept in debt funds are not in bank. Just like money used to buy equity is just money going from one account to another account, Debt funds are also the same, money kept in debt fund go to company, which buys/invest in something and money again goes to some other bank account. Just a change in number in excel sheet of bank. Problem with FD: (1) Tax like you said (2) If I break FD before maturity, there is a penalty, if rate of interest was 7%, if I break before maturity, bank will give savings account rate like 3% only, they remaining 4% is gone as penalty. (3) Due to point 2, FD is not much helpful for rebalancing maintaining proper asset allocations when doing goal based investment. (4) TDS on interest acquired above 10K per year. .........If there is lesser money in bank, it means there is more black money in the economy. People are dealing in cash. May be it is a sign of increase in corruption.
Increase fixed deposit rates and reduce tax liability on fixed deposits. Otherwise there is not much incentive to invest in fixed deposits after a certain extent.
Banks are given huge targets for selling insurance and mutual funds. Our management is threating of all consequences of not doing selling. Until this stops no growth in deposits will happen
As of today Debt mutual fund investment is far better than bank FD specially long term debt funds. Say i invest in debt fund investing in GOI bond maturing in 2033, in the falling interest scenario which is shortly expected to happen, it will yield a return of above 10% over next year. Maybe after the interest rates have fallen then one can think of shifting to FDs also why FD even then and why not GOI bonds or state bonds, which are now available to the common man as the minimum ticket size is 10 k and carry same or better interest rates with sovereign garuntee?
If debt funds invest in GOI bonds then why take out money in any case? If interest rate falls then will the bonds not be paying lesser interest rate when you take out the money from debt MF to buy the bonds?
@@religionofpeace782 valid point. The only reason I see for now is someone redeeming from these kinds of debit funds is to book profit and use it for further investment or other use, else one can continue with the same fund with appreciated returns. BTW I invested some money in GOI BOND debit funds 6 months back and the YTD is almost 12% and as the 10 year GOI BOND yield has fallen from around 7.5% to below 7% I think and if it falls to say 5.5 or 6 % in a years time I see above 15 % XIRR.
Sir do a episode also on the banks increasing their landing rate every 2-3 months. When the Rbi has not increased its repo rate how has SBi and Bank of Baroda increased its lending rate twice in the past 3- 4 months.Further they do not inform their borrowers of the increase in lending rate and change in EMI. WE indians are being short charged.
Government should implement no income tax on fixed deposit interests, no long term capital gains tax, Income tax only above income over 50 lakh rupees as everyone pays GST. All these things will put more money in the hands of middle class consumers. 6:18
Debt mutual funds play a role when you want to invest systematically and regularly into an asset allocation plan. It helps in rebalancing from debt to equity and vice versa. Can't practically do that with FDs. FDs have their own place in a financial plan.
Selling Life Insurance in a Bank is very misleading. Banks must do their jobs and not sell any other products except Banking Products. What's more, even HDFC Securities in Dehradun is selling HDFC Life as an investment option. Life Insurance is never an investment. It is a way to safeguard your family against any misfortune that might happen in the life of the Proposer. His family will be protected. Thus, whether HDFC or ICICI or whichever Bank the Insurance sold is to cheat their customer. Be WARNED.
Deferring incidence of taxation on Bank FDs from annual accrual to FD encashment may not make significant difference to small investors unless such accrued compounded interest is taxed at a spl lower rate in different slabs, tax rate reducing corresponding to longer periods of FDs which may be lost in case of pre-encashment.
I think apps like stable money are here to increase fds ,but in small finance bank . Public sector banks are failing to attract deposit because of cross selling target of psbs. Such as insurance, mutual fund. Sbi is known for this
Above measure with a timing like today where liquidity is chasing like mad anything like a small size IPO to mega overvalued companies, FDs would have got automatically got incentivizes as a safer option...Must also remember, Banks have been responsible themselves for nil returns through FDs with poor rates of 4/4.4% with value also decimated by raging inflation.Govt encouraged, as beautifully highlighted by Debashish ,the shift...
Bank employees are themselves encouraging / selling / misselling customers to move their maturing bank deposits to insurance products to earn more commissions. Obviously, deposits will not grow. LOL.
But at a time like today ,best efforts will be difficult as there is certain uncertainty generated around solvency of banks, which is a matter of trust
The dignity of the customers is lost in the Bank. Senior Citizens are insulted by Bank Cashiers refusing service and commanding them to go deposit machine. Infact the staffs should be enthusiastic to serve customers. Other business people coming to deposit holding the cash rotated in rubber band are encouraged. They never turn them back or warn them not to crumble the notes. Bank Passbook printing machine not checked to get good printing of entries. They are lazy. Interruption by personal mobile when customers go to them for any work. Lax laws and complicating MF gains is really rubbish. Senior Citizens need FD interest atleast 8.50% per annum. Present FD intetest is inadequate as they are not pensioners. Dividends for Senior Citizens or FD intetest for Senior Citizens should be totally tax free. No TDS should be deducted. Bank should concentrate on NPA recovery so they could lend more but why worry for FDs.
The common man who doesn't understand the stock market will always invest in Gold as Bank Deposits aren't that attractive. They could offer an incentive to nudge him back to bank deposits by providing an exemption to tax for earnings up to 75 K bank deposits. But this government would rather watch bank deposits go further down than offer that service. Besides you encourage youngsters who have started earning salary to spend by giving tax exemptions till 5 Lakhs rather than the old model of encouraging 80 C (NSC, Bank Deposits).
I would consider putting some money in FDs if the interests rate were made 12% AND the interest earned tax-free. If not, forget it. MFs, stocks, are better. The banks can put a cap on the total amount of FDs I could hold across banks based on a crosschecking of Aadhaar, PAN, etc. The cap determined by the banks, govt is also to be insured to the full amount.
The story of bank deposit are reducing is true but not in whole, first of all banks funds had been destroyed (written off)by the loans given to corporate and that's about lakhs crore Rupees, not a very small amount. Next big issue is Inflation, what is 5-6%currently and by FD and taxation, returns can not match in future whatever marketing policy you will take in consideration. That's why new generation is more on Mutual funds than FD. Furthermore remember the fact that people of India is still supply support for the economy through Mutual Funds and stop banks to use funds uselessly to wrong persons hand. Think of it.
Why to pay income tax on the meager interest rate earned on FD? The money invested in FD is an effect of tax-deducted on the salaries earned of us, middleclass people.
I recently made fd in public sector bank but i have not given proper info about how much tds will be deducted on my fd. Will anybody guide me on this as i have to make some more fd.
My money for deposit is after paying the tax and again I need to pay tax on a small interest amount I receive on such deposit. If the source of deposit was tax free, then deduct TDS.
Comparison between debt mutual fund and fd is not correct, because debt mutual fund units and its underlying asset is tradable while fds are non tradeable securities
Bank deposit can increase if the govt doesn’t impose tax on the interests of Fixed Deposits. It is a fact that most of the FDs are the residues after paying the income Tax on the salaries and pensions earned by the people
To manage this situation fd rates should be increased without increasing lending rates for at least 4-5 quarter. And the gap to be manged by each public sector banks by better managing their operations..taking cost cutting measures including salary reviews of all non performing employees drawing hefty amounts per month....
I think Govt through its Budget missed a Great ipporunityto reverse the flow .Whilst overtaxing through LTCG and STCG, it could have removed the tax from FD ( done between let's say 23 Jul till 2027 . Else it could be taxed at std rate of 5/10% irrespective of income slab...real returns with falling inflation with FD rates of around 7.7 could have done the rest.
With high inflation, education and medical costs souring, and higher EMIs ,where is the the savings for middle class to invest in FDs ..that is the problem..many IT companies have not given increments,many graduates r unemployed,so parents savings r used to support these graduates till employment...
Its much more easy to invest in debt funds and redeem whenever required. Debt funds are great in case of emergency. I can redeem them anytime whenever need arises without paying any penalties or without visiting banks and wasting 1 to 2 hours. If Banks want deposits then they better offer attractive interest rates! Let SBI announce that interest rates will be 10% and there will be stampede in bank to do FD!
Indian markets are getting inflated with excess money coming through mutual funds which is increasing valuation .The day bubble bust many middle class and lower middle class families will find themselves in serious prob .More over FD rates are reduced from 8 -9% to just 6 and 6.5% which doesn't even cover inflation .
So let me get this straight. Where does debt mutual fund go? I mean who uses it. If they r the same people who r going to be benefitted from the bank loans that are eventually going to be given then i think its useless to do this exercise in logic. Ofcourse the system works that ways but u can see what the system is designed to do. Encourage more and more inefficiencies and delay everything.
until they remove bank deposits from income tax , it will be like this.
Yes it’s an easy solution. No brainer. The sad part is they keep taxing even senior citizens on FD. I know few people who are 80+ still in tax terrorism.
How is that possible to remove?? Unless they give higher rates which can beat inflation people won't be attracted to fd. Inflation at 7% and Fd rate at 7.5%. who wants 0.5% return 😂😂
@@imran4006 Post tax it is below 5%.
Tax on fd should be 10 percentage
income tax terrorism is the reason
It's Modi and Nirmala Tax terrorism
Very true
Yes shameless country pay 30 percentage income tax
Mr. Basu is absolutely right. FD should be taxed only on withdrawal. I always thought this is obvious and rational till my CA told me the government of India doesn't think so. It makes no sense to tax me on something which I have not yet gained in hand and am in no position to capitalise. That's like prospective taxation. Imagine getting taxed on your property in the same way arguing that the value of your real estate is appreciating every year even if you are not yet selling it. It's ridiculous.
it is taxed per FY . am I correct?
@@rsv1503 The bank will deduct TDS every quarter. At the end of the FY, you file it under income from interest and its taxed as per your slab. Having your TDS deducted doesn't automatically imply that you forfeit that amount. You may receive a refund at the end of the year depending on your slab.
So after TDS, from remaining salary we create FD in bank
Then
TDS deducted on that
"total existing fd amount" also Without even fd maturity
Or
Tax deducted only on " interest" that added in fd account?
@@rsv1503monthly tds and then once per year again
Bhai unko gaaand marna hei middle class ka at the behest of taking poor people care so that they can give freebies..for vote. .also note that political donation is 100% exempt from tax. Imagine 😂😂😂
Govt is punishing savers with tax. So this will continue to worsen.
Increase fixed deposit interest rate or remove TDS
Removing tax is the best way. They should remove tax for at least senior citizens and unemployed or self employed .
Government will squeeze every drop of money from small investors: tds, etc. Their friends meanwhile get 1000s crores loan written off..
For that you must be generating jobs in the 100s if not 1000s dIkHeaD
Till the government doesn't come out & publicly say that "now Mutual Fund Sahi Nahi Hai!", I will continue investing in Equity Mutual Funds. I will not make the mistake of investing in Bank FDs just because Banks need money to loan it out to others. I will invest in Bank FDs if & when the interest rates rise to above 9.5% per annum. Till then Equity Mutual Fund only Sahi Hai!😊
Bank interest must be exempted from income-tax
Can't they understand that they tax our salary anything left is put as deposit even this get taxed 😢
If even the fd interest is huge
Like more than 5 L per annum
Then only gov should consider having small tax
Otherwise why to
Tax terrorism + Charges terrorism = ↘Deposit + ↘Investment
If bank deposit insurance is further increased from 5 lacs to 20 lacs, people may invest in FDs.
under bjp not possible they will reduce to zero insurance if modi will get less votes like this year
@@two8915😂😂
Yes, that insurance of max 5 lacs is very low; in the US it is 210 lacs.
@@two8915 BJP increased it from 1 lakh to 5 lakh and changed the rules so that depositors will get money immediately. Previously depositors were getting money after 5/10 years.
@@Anton-tf9iw 210 lacs in USA is equivalent to about 10 lacs if calculated at PPP.
Where’s the incentive for common man to put money in bank deposits…low returns, less than inflation, taxed heavily then it gets lent to useless corporates they fail and written off . Rather people are willing to take risks with mutual funds, equities
Equity isn't for common people. They only get the empty plate with no food at the end
During UPA government, we were getting 9.5% interest rate. Now it's 7
Inflation was also 8-12% from 2009-2013. It was even more crazy for before Vajpayee era
@@adrianfernandes9150 inflation at that time was sky high as well so real gain was less
But politicians robbed banks
Nothing to do with upa or bjp.
Interest rate must be lower for growth.
In upa days inflation was higher leading to high interest rate
@@allahuakbarquran742
Don't live in imagination
People only kept money in FD for 80C. With new tax regime no incentive for people to lock into a 5 year FD.
Fd gives benefits in 80C ?
Or ppf account?
@@mradu30singh Both. There are taxing saving FD.
FD for more than 5 years is eligible for 80C exemption. But banks are offering slightly less interest on these long term FDs.
I am a senior citizen staying in a small town in Odisha. I have a FD in a nationalized public sector bank in Asansol (WB). In May this year, I contacted the branch office of the bank in my town for details of my tax deductions pertaining to my FD for filing my IT Returns. I was promptly told to contact my original bank in Asansol. I sent them email requests, but got no response. Finally, I went to my bank in Asansol by changing two trains, only to be told to come back in June ! Had I invested my money in a mutual fund or even in LIC, I would have been spared this harassment.
Complain to rbi ombudsman, and then see. They'll hand deliver your documents to you.
Bro do online FDS you will get tds certificate or even AIS form will show tds deducted
Why don't you check your Income Tax portal Annual Information Statement and TRACES Statement which is updated by Bank before 31st May, of evert year for the previous year.
@@rajK29_Bank obdusman call the Bank staff and hand in glove with them. No serious action.
@@rams5474 really? 🥲🥲 everyone is crooked nowadays it seems
We deposit in banks and they hand it to crooks like Adani and other businessmen and politicians and end up saddled with huge NPAs . FD interest rates are pathetic and we have to again pay tax . It is wonder that people give money to banks . FM should address key problems if she expects people will handover their hard-earned money to inefficient and arrogant banks . Let's not talk about interest Rates now .
It would really help if govt stops taxing accrued interest. Taxes should only be applicable only when interest comes into savings/current account from FD.
The tax on FD interest has to be aligned with LTCG tax, or else nobody will do FD and pay 30% + tax on interest earned.
Banks should pay atleast 12% interest on FDs as the real inflation is 7%and tax TDS collected on redemption
reduce salary of top management , reduce infra cost of bank
Government Banks MD are least paid
Moneylife failed to notice several things in article " bank fd sahi hai".
1) by imposing 20% , 12.5% , 0.2% tax rates on equity. It wont drive away investors from investing in stock equity markets.
2) By putting a litigation that if u choose new regime tax system for two consequtive years, you cant get back to old tax regime. (old regime gives 80c advantage like e.g "5 year tax savings fd". New regime discourages people to save.
3) By introducing ELSS for 3 years against 5 year tax savings fd. How can expect citizens to invest in FD.
4) And any incentive for tax savings bank FD under 80c? . Only 1.5 lakhs. It is not increased to some 3 Lakhs.
5) TDS factor in bank FD. E.g You open a FD of 1 Lakh for 1 year @ 5% interest earning 5000 approx. Then 30% tds it comes to 3500 rupees only. So net interest is only 3.5% interest. Now tell me why you put title as " FD sahi hai". " FD sahi nahi".
6) govt should give tax inventives on fd returns. Like no tds tax upto 1 lakh. E.g you have fd of 1 crore which gives interest of 5 lakh approx. Then 1 lakh is exemp ( taz free & tax exempt). Tds should be applicable only to remaining 4 lakhs in this case.
7) also tax savings 5 year fd is ought to be tds free. If i open a 1.5 lakh fd for 5 years and after 5 year year suppose i get 35k interest then entire 35k should be tax free.
8) also yearly deduction of tds as accured interest for 5 year fd. This accured interest is also shown as " income from other sources". Theae things should be fixed.
9) corp fd's like shriram & muttu are giving higher returns.
( note: all points written above are reasonable and aren't exxagerated.
** Collected points from other users
9) 12.5% vs 30% rate
10) fd rate for 5 years should be 9% so to get 50% retuns in 5 years.
10) banks themselves are hard sellung MF's. Treating FD's as burden. And FD customers as buden.
11) insurance to increase upto 1 crore.
12) long term incentive of 1 lakh to even FD's
13) debt mf giving 10% returns.
Very insightful. If the bank FDs become similar to NSC/KVP, i.e. no TDS then I think bank deposits will grow. And if the FDs are taxed only on redemption then banks will see huge surge of deposits and the issue will be resolved.
Even RBI savings bond cumulative option do not deduct tax. On maturity only the tax to be paid
Well articulated video.
No one brought banks to this situation. It’s all sell inflicted problems by banks.
First they should stop harassing their employees to sell MFs and ULIPs.
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Deposited money should be safe against bank defaults, all Amount should be insured ..
Yes. That is a big change needed
Income tax policies on interest income is the main culprit for low FD in bank. Govt always hardened the tax policies for general salaried people. Govt should also focus on to minimize revenue expenditure ( non-productive expenditure).
IN feb 2023 almost 35000 cr lying in banks were taken by govt instead of giving it to descendents of the account holders. Also if a loan is pending recovery people pester family members too , but incase of credit bank balance or fd are not returned to rightful owners , this is gross injustice for bank depositors who forget about their fd , balance etc or pass away with family members not knowing about the same .
Wait. That should go to nominees no? Or descents? Govt takes it?
People have become smart now..the internet has chsnged the way we think.We will do whatever to make our money work hard.
Government gone mad extorting tax
But in FD, we need to pay TDS every year, in Debt mf, we have to pay online during remediation year. Sorry you covered this point
The main reason for the investor is that they don't trust the bank. Any bank can fail and govt only give insurance upto 5 lac. Whereas in MF that kind of risk in not there...maybe the worst case the return may be less but definitely it will be better than FD returns. Worst case, we will lose on the time but your investment is safe. Also, FD returns are taxed as per normal tax slabs whereas MF return for long term capital (over 1 year) is taxed at 12.5%.
The solution is :- 1. Give 100% insurance on FD investment (atleast FD principals).
2. TAX FD return at 12.5% like MF.
3. Freeze minimum FD return @7%
You may see increase in FD deposit if you implement the above.
Increasing interest rate is only solve problem of deposits.
Govt should exempt fd from TDS
Congratulations Mr Debasis Basu for highlighying an issue affecting everyone but most customers of banks were not even aware of it..
Trend has changed and it is not going to revert until some strong reason comes. My father put all his saving in FD. That was different time and the interest was upto 12 percent in FD once upon the time. Myself put all my savings in equity. To make FD attractive govt has to do some realistic thing like make only 10 percent tax on FD. If I put my money in FD , i have to pay 30 percent tax , because of that FD is not good for me. Net return is also very low in FD. In equity after so much ups and down the net return is always good if you invest money in good and decent companies. Just saying FD sahi hai will not make FD good for me. Govt need to prove it. In FD i have to pay tax on interest earned every year even I lock FD for 5 years.In equities I need to pay tax only in the year when i sell and took profit. I am ok with the risk which comes in equities but i am not ok with the return in the FD. FD might be 'sahi hai' for Govt and Bank but not for me.
Govt should be more honest in reporting the inflation to even consider FD rates. With sky high inflation at retail, nobody will trust the official numbers and willing to take more risk.
Right , FDs too can be treated as ltcg if duration is two years and interest paid on completion
FM is mainly responsible for the attrition in bank deposits because of regressive taxation policies proposed in 2024 budget.
1.Banks are charging for each and every service provided by them.
2. Their customer service is horrible.
3. Even if you deposit cash, then you get a notice from IT. So why should a customer put money in banks and entertain unwanted problems.
4. All our hard earned money is taxed, which leaves little money in the hands of customers.
5.Banks may collapse at any time. So people keeping money at home.
Very objective video, no blame game upon banks. This is a rare video.
Glad to hear you liked it!
Just increase fd rates.... people will come running....
Right now stock market is better
I will invest in bank deposit only if i don't have to pay tax on interest that I haven't even received every year. Paying at the end of the tenure makes sense, but I don't even have the money but I need to pay tax on it. If banks provide an option to deduct 30% interest that is also fine, atleast I don't have to arrange that money.
Banks do deduct tds from interest earned. But balance tax ifany is to be paid
@@jsrblrkannan4119 that TDS is only 10%. For someone in 30% tax slab, if they want to keep lakhs of rupees in FD then every year they will have to account the money to pay the tax on the interest amount. If they don't pay it before the advance tax deadline, then the added penalty too.
Why making it complex
Mae 50k FD interest tax free for everyone (like 1 Lac in equity) then see the impact
You just made it complex because what you wrote isn't clear😂
@@religionofpeace782 he meant in long term equity if u earn 120000 then only 20k is taxed. 1L is exempt. Understood.
@@mohanv88 yes similar policy for FD will encourage people
In a country where banks are lending risky money - 95% loan sanction for homes, 90% cars and 70% mobile phones are on loans. Why would someone deposit in banks 😂
We don't have fiat currency with endless printing machine like dollar. So yes, that's how we finance our economy
You forgot about corporate loans running into crores later being written off.Recently PSU banks loans wrote off to the extent of ₹15 lakh crores.Not only that the FM is talking nastily being the blue eyed girl of Modi that written off is not waiving off.
Any knowledgeable banker knows that she is fooling the common man by that.
Sorry state of affairs.
If you assume 10% on the write off amount of ₹15 lakh crores it comes out to ₹1.5 lakh crores interest alone per year.
But nobody is talking about it including you , Debashish ji.
Govt to blame..they are biased towards higher and lower classes.
Debasis sir is spot on, bank officials mis-selling insurance happens in large and even smaller banks, attacking debt mf with taxes is shooting on foot (over a period of time people will just go global and invest due to such yearly changing policies), bank officials should not be allowed to sell mld,insurance etc then all deposits will be back in bank.
Finance ministry can deposit the PF money into PSU banks and increase the age limit from 58 years to 60 , they should also give higher returns in FDs by 0.25 % for more than 3 year lock in
PF has a crap portfolio as it is. No need to make it even crappier with bank FDs.
Misselling is the biggest culprit. Never ever in the last 10 years has any pvt bank let a person open a simple FD without making him go through all the insurance force selling attempts…
Why government forces to keep money in banks if they cannot guarantee the safety of Amount
TDS 10 % without pan 20 %. submitting 15G 15H and even then often TDS deducted and have to wait for refund. Bank reporting to IT etc. Etc.
If bank don't take TDS annually...i won't break my FD...
Increase FD rate to 8% I will do the deposited Arbitrage fund has better option as one can withdraw without penalty
If bank can give 12 to 13 percent interest against FD then there can be chances young people may deposit spare money.Similarly bank can increase interest in loans.
The right step in kerping investors well informed thanks for sharing your knowledge and analysis.
Looking forward to such inputs.
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Banking Mafias r getting right treatment from Indian middle class....
I disagree that funds kept in debt funds are not in bank. Just like money used to buy equity is just money going from one account to another account, Debt funds are also the same, money kept in debt fund go to company, which buys/invest in something and money again goes to some other bank account. Just a change in number in excel sheet of bank. Problem with FD: (1) Tax like you said (2) If I break FD before maturity, there is a penalty, if rate of interest was 7%, if I break before maturity, bank will give savings account rate like 3% only, they remaining 4% is gone as penalty. (3) Due to point 2, FD is not much helpful for rebalancing maintaining proper asset allocations when doing goal based investment. (4) TDS on interest acquired above 10K per year. .........If there is lesser money in bank, it means there is more black money in the economy. People are dealing in cash. May be it is a sign of increase in corruption.
Increase fixed deposit rates and reduce tax liability on fixed deposits. Otherwise there is not much incentive to invest in fixed deposits after a certain extent.
Also there is a need to increase the limit of deposit insurance, per depositor, per bank, from the existing ceiling of rupees five lakhs..
Banks are given huge targets for selling insurance and mutual funds. Our management is threating of all consequences of not doing selling. Until this stops no growth in deposits will happen
FD is a depreciating asset, and have to pay income tax for such a wonderful depreciation.
As of today Debt mutual fund investment is far better than bank FD specially long term debt funds. Say i invest in debt fund investing in GOI bond maturing in 2033, in the falling interest scenario which is shortly expected to happen, it will yield a return of above 10% over next year. Maybe after the interest rates have fallen then one can think of shifting to FDs also why FD even then and why not GOI bonds or state bonds, which are now available to the common man as the minimum ticket size is 10 k and carry same or better interest rates with sovereign garuntee?
If debt funds invest in GOI bonds then why take out money in any case? If interest rate falls then will the bonds not be paying lesser interest rate when you take out the money from debt MF to buy the bonds?
@@religionofpeace782 valid point. The only reason I see for now is someone redeeming from these kinds of debit funds is to book profit and use it for further investment or other use, else one can continue with the same fund with appreciated returns. BTW I invested some money in GOI BOND debit funds 6 months back and the YTD is almost 12% and as the 10 year GOI BOND yield has fallen from around 7.5% to below 7% I think and if it falls to say 5.5 or 6 % in a years time I see above 15 % XIRR.
Nice presentation... Good suggestions
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Sir do a episode also on the banks increasing their landing rate every 2-3 months. When the Rbi has not increased its repo rate how has SBi and Bank of Baroda increased its lending rate twice in the past 3- 4 months.Further they do not inform their borrowers of the increase in lending rate and change in EMI.
WE indians are being short charged.
Government should implement no income tax on fixed deposit interests, no long term capital gains tax, Income tax only above income over 50 lakh rupees as everyone pays GST.
All these things will put more money in the hands of middle class consumers. 6:18
Very well explained.
Thank you.
Glad it was helpful!
Debt mutual funds play a role when you want to invest systematically and regularly into an asset allocation plan. It helps in rebalancing from debt to equity and vice versa. Can't practically do that with FDs. FDs have their own place in a financial plan.
Selling Life Insurance in a Bank is very misleading. Banks must do their jobs and not sell any other products except Banking Products. What's more, even HDFC Securities in Dehradun is selling HDFC Life as an investment option. Life Insurance is never an investment. It is a way to safeguard your family against any misfortune that might happen in the life of the Proposer. His family will be protected. Thus, whether HDFC or ICICI or whichever Bank the Insurance sold is to cheat their customer. Be WARNED.
Banks push you to buy insurance and mutual fund and yes even F&O
SBI sold mutual funds to my senior citizen mother who had no idea what MFs were. That's how unethical banks are.
Thanks for this very informative video.
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No income tax, TDS should be chatged on intetest on bank deposits till 10 lakh rupees.
Deferring incidence of taxation on Bank FDs from annual accrual to FD encashment may not make significant difference to small investors unless such accrued compounded interest is taxed at a spl lower rate in different slabs, tax rate reducing corresponding to longer periods of FDs which may be lost in case of pre-encashment.
I think apps like stable money are here to increase fds ,but in small finance bank . Public sector banks are failing to attract deposit because of cross selling target of psbs. Such as insurance, mutual fund. Sbi is known for this
Above measure with a timing like today where liquidity is chasing like mad anything like a small size IPO to mega overvalued companies, FDs would have got automatically got incentivizes as a safer option...Must also remember, Banks have been responsible themselves for nil returns through FDs with poor rates of 4/4.4% with value also decimated by raging inflation.Govt encouraged, as beautifully highlighted by Debashish ,the shift...
Debt mutual fund u can redeem anytime..but if u redeem ur FD in de Middle there is penalty on breaking ur FD..1% or more..
Bank employees are themselves encouraging / selling / misselling customers to move their maturing bank deposits to insurance products to earn more commissions. Obviously, deposits will not grow. LOL.
But at a time like today ,best efforts will be difficult as there is certain uncertainty generated around solvency of banks, which is a matter of trust
The dignity of the customers is lost in the Bank.
Senior Citizens are insulted by Bank Cashiers refusing service and commanding them to go deposit machine.
Infact the staffs should be enthusiastic to serve customers.
Other business people coming to deposit holding the cash rotated in rubber band are encouraged.
They never turn them back or warn them not to crumble the notes.
Bank Passbook printing machine not checked to get good printing of entries.
They are lazy.
Interruption by personal mobile when customers go to them for any work.
Lax laws and complicating MF gains is really rubbish.
Senior Citizens need FD interest atleast 8.50% per annum.
Present FD intetest is inadequate as they are not pensioners.
Dividends for Senior Citizens or FD intetest for Senior Citizens should be totally tax free.
No TDS should be deducted.
Bank should concentrate on NPA recovery so they could lend more but why worry for FDs.
mis selling and dtupidity of retail investors
The common man who doesn't understand the stock market will always invest in Gold as Bank Deposits aren't that attractive. They could offer an incentive to nudge him back to bank deposits by providing an exemption to tax for earnings up to 75 K bank deposits. But this government would rather watch bank deposits go further down than offer that service. Besides you encourage youngsters who have started earning salary to spend by giving tax exemptions till 5 Lakhs rather than the old model of encouraging 80 C (NSC, Bank Deposits).
Good analysis
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I would consider putting some money in FDs if the interests rate were made 12% AND the interest earned tax-free. If not, forget it.
MFs, stocks, are better. The banks can put a cap on the total amount of FDs I could hold across banks based on a crosschecking of Aadhaar, PAN, etc. The cap determined by the banks, govt is also to be insured to the full amount.
The story of bank deposit are reducing is true but not in whole, first of all banks funds had been destroyed (written off)by the loans given to corporate and that's about lakhs crore Rupees, not a very small amount. Next big issue is Inflation, what is 5-6%currently and by FD and taxation, returns can not match in future whatever marketing policy you will take in consideration. That's why new generation is more on Mutual funds than FD. Furthermore remember the fact that people of India is still supply support for the economy through Mutual Funds and stop banks to use funds uselessly to wrong persons hand. Think of it.
Tax is more in fd
Why to pay income tax on the meager interest rate earned on FD? The money invested in FD is an effect of tax-deducted on the salaries earned of us, middleclass people.
Create 5 year tax free FD at 8%. Money will flow
I recently made fd in public sector bank but i have not given proper info about how much tds will be deducted on my fd.
Will anybody guide me on this as i have to make some more fd.
My money for deposit is after paying the tax and again I need to pay tax on a small interest amount I receive on such deposit. If the source of deposit was tax free, then deduct TDS.
Comparison between debt mutual fund and fd is not correct, because debt mutual fund units and its underlying asset is tradable while fds are non tradeable securities
Bank deposit can increase if the govt doesn’t impose tax on the interests of Fixed Deposits. It is a fact that most of the FDs are the residues after paying the income Tax on the salaries and pensions earned by the people
To manage this situation fd rates should be increased without increasing lending rates for at least 4-5 quarter. And the gap to be manged by each public sector banks by better managing their operations..taking cost cutting measures including salary reviews of all non performing employees drawing hefty amounts per month....
I think Govt through its Budget missed a Great ipporunityto reverse the flow .Whilst overtaxing through LTCG and STCG, it could have removed the tax from FD ( done between let's say 23 Jul till 2027 .
Else it could be taxed at std rate of 5/10% irrespective of income slab...real returns with falling inflation with FD rates of around 7.7 could have done the rest.
Govt lost a simple opportunity
Repo rate incentive for big banks,give a discount on repo rate of 1 pc for 10 pc rise in deposit year on year.
With high inflation, education and medical costs souring, and higher EMIs ,where is the the savings for middle class to invest in FDs ..that is the problem..many IT companies have not given increments,many graduates r unemployed,so parents savings r used to support these graduates till employment...
Unless and ubtil banks compensates savers adequately deposit will not grow. FM wants poor pensioners money at low cost to goxto crony capitalists
The new generation doesnt go to banks nor do they do fds
Its much more easy to invest in debt funds and redeem whenever required.
Debt funds are great in case of emergency. I can redeem them anytime whenever need arises without paying any penalties or without visiting banks and wasting 1 to 2 hours.
If Banks want deposits then they better offer attractive interest rates!
Let SBI announce that interest rates will be 10% and there will be stampede in bank to do FD!
Absolutely true sir
You're welcome!
Tax on FD 😊 main reason and increase FD interest
After sixty years of age one should have tax on interest as well no long term capital gains tax , after all any one invests for his retirement
Indian markets are getting inflated with excess money coming through mutual funds which is increasing valuation .The day bubble bust many middle class and lower middle class families will find themselves in serious prob .More over FD rates are reduced from 8 -9% to just 6 and 6.5% which doesn't even cover inflation .
Remove the tax from FD and the magic
So let me get this straight. Where does debt mutual fund go? I mean who uses it. If they r the same people who r going to be benefitted from the bank loans that are eventually going to be given then i think its useless to do this exercise in logic. Ofcourse the system works that ways but u can see what the system is designed to do. Encourage more and more inefficiencies and delay everything.
बॅन्क मुदत ठेवी वर वर्ष 65 च्या वर₹ 100000 करमुक्त केले पाहिजे.