A Fixed Deposit (FD) is a savings instrument that typically involves depositing a lump sum amount for a defined tenure at an agreed interest rate. An FD makes a great addition to your investment portfolio. You can also use an FD to apply for a loan in times of any financial emergency.

Opening an FD account is easy and helps you develop a healthy saving habit. The interest rate for a fixed deposit is usually determined at the time of booking for the selected tenure, subject to applicable terms and conditions. Fixed deposit returns are generally not directly linked to market movements during the deposit tenure.

A Shriram Fixed Deposit is easy to open, as you can initiate the process online. You can use the FD calculator to check how much interest you can get from a deposit of your specifications. Senior citizens can get an additional interest rate of 0.50% p.a. on fixed deposit they open.

What is a Fixed Deposit?

A fixed deposit is an investment instrument which helps you develop a healthy savings habit. You can plan your investments according to your financial goals because an FD has the features of a flexible tenure. The returns on a fixed deposit are consistent and will not change even with market fluctuations. If you ever need money for an emergency, you can avail of a quick loan against a fixed deposit.

Applying for a fixed deposit requires a few documents and is available at financial institutions. In some cases, loans against fixed deposits may be available, subject to applicable terms and conditions.

Eligibility Criteria

An account for a fixed deposit can be opened very quickly. The required paperwork and regulations for applying for an FD are listed below:

·To determine whether you have the resources to apply for an FD, you must check the minimum investment requirement of the financial institution of your choosing.

·You must be a resident of India. The Non-Resident External (NRE) and Non-Resident Ordinary (NRO) FDs can open an FD through the offline channels.

·A Passport, Aadhaar card, PAN card, Voter ID, or any other kind of government-issued identification is required as identity proof.

·Address verification is also necessary. You can apply for an FD by submitting a utility bill, Aadhaar, Voter ID or passport.

Features of a Fixed Deposit

The interest rate for an FD is determined at the time of booking for the selected tenure. Below are some commonly cited features of fixed deposits:

One-Time Effort:

Once you have invested in an FD, you do not need to keep checking the market to understand how your investment is performing. In this way, people new to investing can carry on with their lives without worrying about the market volatility. You can also apply for auto-renewals and withdrawals on your deposits.

Predictable Interest Structure:

The interest rate on a fixed deposit is generally determined at the time of booking for the selected tenure and remains applicable for that tenure, subject to the financial institution’s terms and conditions.

Loan against FD:

Some financial institutions allow depositors to avail loans against their fixed deposits instead of prematurely withdrawing the funds. The eligible loan amount and conditions depend on the institution’s policies and applicable terms and conditions.

Reasons You Should Invest in an FD

1. Payout Term:

A fixed deposit can provide various options for you, but the two main choices that remain consistent are a cumulative and a non-cumulative deposit scheme. These schemes allow you to decide the interest payout frequency. If you need frequent funds for small monthly expenditures like paying bills, instalments, etc., then you can choose a non-cumulative account and get the interest from the FD paid regularly.

But if you want to keep your savings locked up to earn a higher interest rate, you can select a cumulative fixed deposit account. Upon maturity, you will get the accumulated interest and principal deposit credited to your linked savings account.

2. Easy Loan accessibility:

A financial institution may allow you to take up to 75% of the FD amount as a loan against it if you need emergency funds. You can continue earning interest from the remaining FD funds during the tenure of the loan, and you won't have to pay any penalty for prepaying the loan amount.

3. Flexibility to Withdraw Funds:

You can easily withdraw funds from a fixed deposit before the maturity date. This facility is known as premature withdrawal. Most financial institutions charge a penalty for such an action. The process of withdrawing the funds is quick and straightforward, making it more convenient for you to receive the amount.

4. Planning Financial Goals:

Since the interest rate of a fixed deposit is generally determined at the time of booking for the selected tenure, it can help individuals estimate the maturity amount in advance, subject to applicable terms.

A fixed deposit can be aimed at a specific purpose, like kids' education expenses, purchase of a vehicle or home appliances. You can use the FD calculator to determine the exact amount of interest you can get for tenure and the amount of your choice.

5. Easy to Monitor:

Once a fixed deposit is booked, the applicable interest rate and tenure remain as per the deposit terms. Unlike market-linked investments, the return structure is usually predetermined for the selected tenure.

FDs make a great addition to your investment portfolio

Different investment instruments such as equities, mutual funds, and gold may serve different financial objectives. Fixed deposits are often used as part of the income-oriented or capital-preservation portion of a portfolio. Maintaining a diversified mix of assets may help individuals balance different financial goals and risk preferences.

Conclusion

A fixed deposit is one of the reliable investments you can add to your investment portfolio. You can customise your FD according to the financial goals you need to achieve. Flexible tenure and attractive interest rates help you develop a healthy savings habit.

Invest in a Shriram Fixed Deposit today to start achieving your financial goals. Shriram Fixed Deposit options can be explored through the available online channels. Investors may review the applicable interest rates, tenure options, and product terms before making a decision. You can also apply for an FD by visiting the website and providing the required information.

Key Highlights:

·Opening an FD is a one-time effort that does not need regular maintenance.

·Fixed deposits can be included as part of a diversified financial portfolio.

·You can apply for a loan against a fixed deposit.

·The flexibility in tenure allows you to plan to achieve your financial goals.

FAQs

1.Why should you invest in a fixed deposit?

A fixed deposit is one of the reliable investment options to meet your short and long-term financial goals.

2.What are the advantages of an FD?

An FD has a flexible tenure, is easy to renew, offers interest payout choices (cumulative or non-cumulative), and the possibility of premature withdrawal or loans against the deposit, subject to applicable terms and conditions.

3.What is the impact of a fixed deposit on investors?

Investors can develop a healthy savings habit without worrying about market fluctuations impacting their deposits.