The types of fixed deposits are term deposit accounts, special term deposit accounts, recurring deposit accounts, multi-option deposit accounts, and annuity deposit accounts. This type of account is where you can receive periodic interest like monthly, quarterly, half-yearly, or yearly before maturity, and of course, on maturity. There is a possibility of premature closure, but there will be a loss of interest because interest PAID is greater than the highest FD interest rates PAYABLE at the time of the closure.
A fixed deposit (or FD as we call it) is one of the most popular savings accounts among Indians of all generations. How come? You can choose from various risk-free investment options when investing in fixed deposits. Market fluctuations are not affected by their fixed returns. And you can use easy FD calculator tools to know your financial outcomes also.
Online FDs can be easily opened with a bank of your choice today. It is also a cumulative and non-cumulative option available. Through compounding, you can generate maximum returns by choosing the cumulative option.
For Indian citizens, fixed deposits are the most popular investment option. The interest rate on fixed deposits differs between institutions, making it difficult to determine which is the best option. Bank FDs have indeed seen an increase in the highest FD interest rates, but they are still offering lower returns than government securities. It’s not always the case, however. FDs offered by banks are riskier than government securities, so they usually yield a higher return. Know your final choice in FD schemes with an FD calculator.
It is the trendiest investment in India to make a fixed deposit. It is the most preferred investment option for most people. Most lenders offer some additional benefits to senior citizens in addition to the best interest rate for normal people. Indians prioritise FDs because they are safe, offer a good return, and offer withdrawal services before maturity.
Are there any fixed deposit schemes in India that are better than others?
Banks and non-banking financial companies in India offer fixed deposit schemes. In our opinion, the FD scheme is better than those offered by its competitors. Several investors offer one of India’s highest interest rates of up to 8.40%. Your fixed deposit is also safe and secure since they are rated “IND AA+/Stable” by India Rating & Research and “[ICRA]AA+ (Stable)” by ICRA.
Below are a few benefits:
- Attractive Interest Rates
- Safety of Capital
- Quick Liquidity
- Saves Tax
In India, fixed deposits come in the following forms:
Cumulative Fixed Deposit:
As soon as your cumulative FD matures, you will receive your interest earnings along with your principal amount. Considering interest is compounded quarterly and paid only at maturity, substantial growth in savings is advantageous.
Non-Cumulative Fixed Deposit:
Unlike a cumulative bond, a non-cumulative bond pays out interest at a frequency determined by you before maturity. You can receive interest payments monthly, quarterly, half-yearly, or annually depending on your preference. An FD may be a good choice for seniors or for people who need to meet ongoing expenses with interest payouts.
Systematic Deposit Plan (SDP):
You can opt for an SDP (Systematic Deposit Plan) if you are unsure about investing all of your savings at once. An SDP allows you to deposit a fixed amount every month over a lock-in period of 12 to 60 months. The deposit amount can be as small as Rs. 5000, and the number of deposits can be between 6 and 48, depending on your preference. You earn interest according to the prevailing interest rate at the time of deposit with an SDP. It is a unique feature of the regular FD plan offered by Bajaj Finance FD, offering fixed deposit interest rates of up to 7.35%.
Tax-Saving Fixed Deposits:
You can claim tax exemption on principal deposits up to Rs.1.5 lakh per calendar year. Within five years, the money cannot be withdrawn. This is known as the “Lock-in” period. A lump sum deposit is required one time only.
Benefits of FD:
- There is a low-interest rate on this loan.
- Senior citizens can get additional highest FD interest rates
- Service for pre-withdrawals
- A service that renews automatically
- NRIs can also make FDs and other investments.
Every bank offers a scheme to lock in a considerable amount for a fixed tenor, as per your interest, known as a term deposit or a risk-free account. In order to achieve their investment goals, investors can choose the best FD that meets their needs. If you are eager to invest in a fixed deposit, it is recommended that you compare the highest FD interest rates offered by different financial institutions. Here is a brief summary of fixed deposits offered by the various banks.
Keep these things in mind before investing in a fixed-rate deposit:
An additional interest rate benefit is available to senior citizens. In the case of Bajaj Finance FD, the Senior Citizen rate is 0.25% higher than the regular rate and can go up to 7.35%. The online mode of opening an FD account entitles investors to an additional 0.10% rate over the offline mode.