Saving Account v/s FD’s if you are in 30% Tax Bracket.

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Returns from Saving Account is more.. (Surprise)

This is true..as after budget 12-13 , 10000/- rs earned on Saving account will be Tax Free

Now say you have account in Yes Bank (Offering Max Interest on Saving accounts) – 7%

Say you have 100000/- to Invest.

Saving Account for 1 year :: 7000/- (interest) – Tax Free
FD Account for 1 year :: (say 9% FD Interest) 9000/- (interest) – 30% Tax == 6300/- Net Amonut.
So….Net Gain of 700/- Rs plus Liquidity (you can withdraw whenever you want)

Interesting….so some time Saving accounts gives you more return than FD’s..

 

 

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