The New Year, a time to celebrate with family and friends, is around the corner. It is the time to give gifts to the people you love and let them know how much they mean to you. But, instead of spending money on chocolates, sweets, and clothes, isn’t it time to give them security? Now, don’t go thinking about security cameras, but think about the security of money. How can you do that? There are a lot of financial schemes you can choose from, but in the long term, Fixed Deposit investments offer the perfect balance between risk and return.
All you need to do is buy an FD in the name of your loved ones and ensure that they earn an income and are guaranteed to receive a sum of money when the deposit matures. But, before you do that, here are some tips you should be aware of:
A Longer Tenure will Get you a Higher Interest Rate
One of the major reasons for gifting an FD is to ensure that your loved one is earning the higher interest possible from the deposited amount. What you can do is opt for a longer tenure! You can judge the difference for yourself – FD interest rates offered by PNB Housing ranges from 8.05%* for twelve months and 8.45%* for sixty months. That is a difference of nearly 40 bps and you should take it into account before finalizing.
Must Read: What Are The Features And Benefits Of Fixed Deposit Account?
Gift an FD as Per the Needs of your Giftee
Bringing joy on New Year’s day is easy if you can understand the needs of the recipient or giftee! Does the person require a regular income source? If yes, then opt for a non-cumulative FD wherein the person who you name the depositor can get monthly quarterly, six-monthly, or annual payments . A fixed income source will bring cheer throughout the year. The other option is the cumulative option, where the amount is deposited for tenure, and the interest is earned at maturity.
Understand the Terms and Conditions of the Offer
PNB Housing has certain terms and conditions that you will have to follow in order to create and gift the FD. For example, if you are opting for a cumulative FD, it requires Rs. 10,000 as a fixed deposit minimum amount. Take into account factors like premature withdrawal and loan facility, so that the gift is usable in case of an emergency. You will also need to factor in applicable gift taxes and the eligibility of the giftee to be named as the depositor.
Don’t Think Twice when Gifting Senior Citizens an FD
One of the major necessities for senior citizens is a stable income source. And, senior citizen FD benefits in India are many. The reason that they are a great gift option as they are eligible for higher interest rates and there is an assurance of returns. PNB Housing offers 0.25% higher FD interest rates for senior citizens.
Must Read: How to Open Fixed Deposit Account Online?
Clear All Doubts Before Investing
Don’t forget to look at the CRISIL rating. If in any doubt, you can call the customer care executives or visit the nearest PNB Housing branch to understand the details. Do your research before finalizing the FD, to make the experience enjoyable for both yourself and your loved one.
Now that you know the essential tips for investing in Fixed Deposits, go ahead and bring the joy of financial stability to your loved one that can last beyond 2023!
FAQs
Are all types of gifts taxable in India?
No, not always. Gifts received from specified relatives such as parents, siblings, or spouse are exempt from tax, regardless of the amount. However, if a gift is received from a non-relative and the total value exceeds ₹50,000 in a financial year, the entire amount becomes taxable under the head “Income from Other Sources.”
How can someone decide which financial gift is most suitable for their loved one?
The best financial gift depends on the recipient’s needs, financial goals, and risk appetite. For example:
- If they prefer safety and fixed returns, a Fixed Deposit or Recurring Deposit works well.
- If they want short-term flexibility, shorter-tenure deposits or cash gifts within tax-exempt limits may be suitable.
- If they are comfortable with a longer investment horizon, longer-tenure Fixed Deposits or other investment instruments can be considered.
Always factor in liquidity needs, taxation, interest rates, and when the recipient may need access to the funds.
Why is a Fixed Deposit considered a good gift?
A Fixed Deposit offers a secure way to gift money. The principal remains protected, and interest accrues over time, allowing the gift to grow rather than remain idle. It is especially suitable for recipients who prefer stable returns without market-related risks.
What terms and conditions should be checked before gifting a Fixed Deposit?
Before gifting a Fixed Deposit, you should review the following:
- Tenure of the FD and interest payout option (cumulative or periodic).
- Premature withdrawal rules and applicable penalties if funds are required earlier.
- Ownership and nominee details, and whether the FD can be transferred or gifted as intended.
Why should I check credit rating agencies before opening a Fixed Deposit?
Credit rating agencies such as CRISIL, ICRA, CARE Ratings, and India Ratings & Research evaluate the financial strength and creditworthiness of banks and institutions offering Fixed Deposits. Higher ratings (such as AAA or equivalent) indicate a stronger ability to honour interest and principal repayments. Reviewing ratings across agencies provides added confidence in safety while helping you balance returns and risk before gifting an FD.
