To explain better, let me introduce you to my friend Mr Patil
Mr Patil was in the habit of going to the bank early morning at 9:30 sharp even before the Bank opened and as usual, all his money was in the bank he would have a current account in the same bank, all family saving account and also fixed deposits in the same bank, this remains me of the story which we all must have read about the frog and the well who never ventured out to see what was around and thought that his well was the universe.
Mr Patil continued to earn a small interest of 7% or less his full life and even his CA did not inform him that the interest on fixed deposit was taxable and so he lost more money and got very little return on his investment. The interest from Bank Fixed Deposits is not sufficient even to tide over inflation.
The most important problem of Bank Fixed Deposit is that when you need money in an emergency, you have to lose interest or pay a penalty for encashing your own money so if for one month you need the money to meet then you have to break the contract and you lose a large amount of interest sometimes also pay back interest to the bank.
The money is also not readily available. You have to go to the bank fill in the necessary forms, submit the fixed deposit receipt, match the signature, and then only after one or two days can you withdraw the money.
If your money is lying in a FIXED DEPOSIT think twice the bank may go bankrupt any day and as per the law only you will get a portion of the money.
In INDIA it is 5 lakhs.
