A Fixed Deposit (FD) is one of the most popular investment schemes because you get benefits like reliable interest rates and predictable returns. A fixed deposit can get better interest rates than a savings account. You can also use the fixed deposit to take a loan. An FD also has a flexible tenure that helps you achieve your financial goals efficiently.

Opening an FD account has numerous benefits that will grow your finances and give you predictable returns. A Shriram Fixed Deposit offers comparatively better interest rates of 8.15%* p.a., which includes a bonus of 0.50%* p.a. interest for senior citizens and 0.05%* p.a. for women depositors. Apart from competitive interest rates, with a Shriram FD, you also get an additional interest of 0.15%* p.a. on all renewals after the maturity of the deposit.

Banks and Non-Banking Financial Companies (NBFCs) offer fixed deposits, and the specifics vary according to the financial institution of your choice. Let's look at the different types of FDs and the best benefits you can get from opening one.

Types of Fixed Deposit Schemes:

There are many types of fixed deposit schemes available in India. You can invest in an FD that will suit the tenure and interest payout you need according to your financial goals. Here are the kinds of FDs you can apply for:

Standard:

A standard FD account is the one that is available at all banks and NBFCs. In this account, money can be deposited for a fixed term at a rate of interest predetermined by the financial institution. Depending on the financial institution of your choice, the tenure of this deposit typically ranges from 12 to 60 months.

Cumulative:

Similar to standard fixed deposits, a cumulative account requires you to invest your money over a specific period. The only difference is that if you don't withdraw your money prematurely, you can earn better interest on it than a standard FD.

Non-cumulative:

A non-cumulative fixed deposit will be perfect for you if you have a limited income and depend on the interest from investments for your monthly expenditure. You can select the interest payout, which will be monthly, quarterly, half-yearly and yearly.

Corporate:

The deposit made with companies is called a Corporate FD. FDs offered by NBFCs also fall under this category. Corporate fixed deposit schemes offer competitive interest rates on your investments.

Senior citizen:

You can get various benefits with a senior citizen FD, but you must be over 60 years of age to be eligible for these facilities. The most significant benefit senior citizens get is an additional interest rate of 0.50%* p.a. over the regular interest rates.

Benefits of a Fixed Deposit:

1. Interest Rates:

Putting your hard-earned savings into an FD can give you better interest rates than keeping them in a regular savings account. Check Shriram interest rates and calculate your maturity amount in minutes with Shriram FD Calculator.

2. Predictable Returns:

This is one of the biggest reasons an FD is one of the most popular investment schemes. Once you invest your money in a fixed deposit, you get predictable returns as the interest rate do not undergo fluctuations and hence, does not impact the returns.

3. Loan Against an FD:

In case of any emergency, you do not have to break your FD prematurely. Instead, you can leverage your fixed deposit, apply for a loan, and continue earning interest on the deposit amount. Most banks and NBFCs only allow you to take up to 75% of your FD as collateral for the loan.

4. Flexible Tenure:

The decision of the tenure for a fixed deposit account depends solely on the holder of the account. The minimum term of an FD depends on the bank or NBFC and can range from 12 to 60 months.

5. One-Time Effort:

Once you have invested in a fixed deposit, you can rest easy knowing that your investment is tied to a fixed interest rate. All you need is a lump sum amount of money to invest, and then you can watch your money grow for the tenure you need.

6. Open FD Online:

With Digital FDs, you can start your savings using just your phone or computer. You don't need to visit any office or carry heavy files. It is paperless, which means you save a lot of time and hard work. You can do it from your house, even at night!

Eligibility to Open a Fixed Deposit:

It is effortless to open a fixed deposit account. Listed below are the documents required and the eligibility criteria to apply for an FD:

• You need to check the minimum investment amount for the bank or NBFC of your choice to see if you have the finances to open an FD.
• Eligibility typically requires Indian residency. However, Non-Residential External (NRE) and Non-Resident Ordinary (NRO) FDs are also available for individuals outside India.
• You must submit identity proof like a passport, Aadhaar card, PAN (Personal Account Number) Card, Voter ID, or any other government-approved identification.
• Address proof is also required. Telephone bill, electricity bill, bank statement with cheque, or any other document that has your address proof can be submitted to open a fixed deposit.

Steps to Open a Fixed Deposit:

There are two ways to book your fixed deposit: Online or Offline. The process in both the modes is very similar, with the only difference that, if you choose the offline mode, you will have to visit the bank/NBFC branch physically. You can visit the bank/NBFC website via online mode and complete the process. Here are easy steps to quickly start a new fixed deposit:

• Step 1: Select the bank/NBFC with whom you want to start your fixed deposit account. Visit the bank/NBFC branch or website and apply for a fixed deposit.
• Step 2: Fill in all the details and submit KYC documents like identity proof, address proof and bank account details.
• Step 3: Post KYC verification, the bank/NBFC will create your new FD account.

Conclusion

A fixed deposit is one of the most accessible investment options to apply for and is reliable. One of the most useful benefits an FD has to offer is predictable returns. With the feature of a flexible tenure, you can always set your deposit according to your requirements to achieve future goals. Use the Shriram FD calculator to determine the interest payout you can get on a fixed deposit of your choice. Open a Shriram Fixed Deposit now to avail of all these benefits and more.

Key Highlights

• A corporate FD can get competitive interest rates than most banks offer.
• You can use the FD to take a loan if you need emergency funds.
• The flexible tenure helps you achieve your financial goals efficiently.

FAQs

What are the benefits of a fixed deposit account?

The top six benefits of a fixed deposit include a competitive-interest rate, predictable returns, flexible tenure, it is a one-time investment, invest online and you can take a loan against an FD.

Is a fixed deposit a good investment?

Yes, a fixed deposit is an excellent way to initiate a healthy savings habit, and you can use an FD to take a loan in times of emergency.

Why invest in a fixed deposit?

A fixed deposit is a great way to grow your savings in a predictable manner.