Safe Returns, Done Smart

Deposits aren’t exciting, but they are the ballast that lets you take equity risk where it actually pays. Use them intentionally: for near‑term goals, stability, and the debt sleeve of your plan.

Where Deposits Fit (And Where They Don’t)

• Fit: Emergency fund, <3‑year goals, and the stability portion of a long‑term portfolio.
• Don’t fit: Inflation‑beating long‑term growth. For 7–10+ years, pure deposits generally lag inflation post‑tax.

Your Deposit Toolkit

Bank FDs/RDs

• Easy to manage; DICGC cover up to ₹5 lakhs per bank per depositor.
• Watch for auto‑renewal at lower rates and premature withdrawal penalties.
• For predictable needs, RDs enforce saving discipline.

Post Office Schemes

• Sovereign‑backed; often marginally higher rates.
• Consider SCSS/PMVVY for seniors; align limits and lock‑ins to cashflow.

Corporate FDs

• Higher rates come with credit risk. Stick to top‑rated issuers, diversify across names, and keep tenures short.
• If you can’t explain the issuer’s business in one line, skip.

PPF (Debt Anchor)

• 15‑year lock‑in, EEE tax treatment; ideal for long‑term debt allocation.
• Use as the “sleep‑well” component, not for liquidity.

Rate And Tax Reality Check

• Interest on bank/post office/corporate deposits is taxed at your slab. Plan quarterly advance tax if interest is material.
• Break large deposits across banks if you need more DICGC cover; do not chase 1% extra at the cost of safety.
• For high brackets, consider SGB coupons vs deposit interest in the overall tax mix.

Practical Playbook

• Laddering: Split FDs across maturities (e.g., 6, 12, 18 months) so something rolls over every few months at prevailing rates.
• Goal‑matching: If fees are due in 18 months, match deposit maturity to 18 months—not 36.
• Liquidity buffer: Keep 1–2 months of expenses in savings, the rest of emergency in liquid/ultra‑short debt funds or short FDs.
• Documentation: Save TDS certificates/Form 26AS entries; reconcile interest with AIS before filing returns.

Tools

• Fixed Deposit Calculator: Compute maturity, effective yield, and penalty impact.
• PPF Calculator: Model contributions and maturity.
• Income Tax Calculator: Estimate post‑tax returns and plan advance tax.