Types of Fixed Deposits: A Comprehensive Guide

Explaining the Types of Fixed Deposit Schemes

• 1. Regular Fixed Deposits

  A regular fixed deposit is the most common type of FD. It involves investing a lump sum amount for a fixed period at a predetermined interest rate. During this tenure, your investment remains locked in, and you earn interest on it. Upon maturity, you receive the principal amount with the interest amount earned. Regular FDs are usually suitable for investors seeking a reliable investment with predictable returns.

  Here are some key highlights of a regular fixed deposit:

  • Fixed interest rate: You receive a predetermined interest rate for the entire deposit tenure. Shriram Unnati Fixed Deposit offers interest rates as high as 8.15%* p.a. (inclusive of 0.50%* p.a. for senior citizens and 0.05%* p.a. for women depositors).
  • Tenure options: Regular FDs offer a range of tenures, from a few days to months and years. With Shriram Finance, you can choose a tenure that aligns with your financial goals, ranging from 12 to 60 months.
  • Interest payout options: Non-cumulative FDs offer regular interest payments, providing a steady income stream. You can choose from monthly, quarterly, half-yearly, or yearly payouts. Opening an FD with Shriram Finance allows you to choose from multiple payout options based on your financial requirements, like monthly, quarterly, half-yearly, and yearly.
    In cumulative FDs, your interest earnings are added back to your principal each year. This compounding effect leads to significantly higher returns when compared to a non-cumulative FD. This is usually ideal if you have long-term savings goals.
  • High liquidity: While your money is locked in for the chosen tenure, you may liquidate it (premature withdrawal) based on your needs, however; by paying the stipulated penalties.

• 2. Fixed Deposits for Senior Citizens

  Senior citizens often seek investment options that offer stability and higher returns. Shriram Finance provides an additional interest rate of 0.50%* p.a. for senior citizens and 0.05%* p.a. for women depositors.

  Things to remember about fixed deposits for senior citizens:

  • Higher interest rates: Senior citizens typically receive exclusive interest rates on their FDs compared to regular FD investors.
  • Easy to set up: Senior citizens may open and manage their FDs conveniently through an end-to-end digital process.
  • Nominee facility: You may add a nomination for the safety of your investment and ensure the benefits of your investment are passed on to your loved ones.

  Note: It is recommended that you compare different FD for senior citizens options, offered by various financial institutions to choose the one that best suits your financial goals and risk appetite.

• 3. Fixed Deposits for Women

  Fixed deposits for women are an excellent source to grow their savings. At Shriram Finance, we recognise this and provide an additional 0.05%* p.a. on opening an FD with Shriram Finance. The goal of fixed deposits for women is to encourage them to save and invest for their future, whether it is for personal goals, family needs, or long-term stability.

  Here are a few things to remember about fixed deposits for women:

  • Additional interest rates: Additional interest rates for women depositors to ensure they can reap additional benefits out of their investment and plan for a reliable future.
  • Flexible tenure options: The choice to select the tenure enables women to meet their financial goals. At Shriram Finance, tenures for FDs range from 12 to 60 months. This allows women to choose a term that aligns with their financial requirements.

• 4. Fixed Deposits for NRIs

  FDs are a reliable investment option for Non-Resident Indians (NRIs) looking to manage their savings in India. NRIs can choose between Non-Resident External (NRE) and Non-Resident Ordinary (NRO) FDs.

  Before investing in fixed deposits for NRIs, remember this:

  • NRE FDs or Tax-Free foreign earnings: You may enable the deposit of foreign income, with interest earned being exempt from Indian income tax.
  • NRO FDs or Managing Indian income: You may manage income earned within India, with interest earned being subject to Indian income tax.

  Note: Before choosing the right type of FD for you, it is essential that you compare interest rates across financial institutions and understand tax implications. FDs are a practical choice for NRIs to steadily grow their funds in India.

• 5. Fixed Deposit for Monthly Income

  FDs for monthly income can be a suitable choice if you are someone who is looking for a steady source of regular income. By opting for a non-cumulative fixed deposit, you can receive a portion of your interest earnings every month. At Shriram Finance, you can choose monthly, quarterly, half-yearly or annual options to get regular payouts.

  Here are some key aspects to consider before investing in fixed deposit for monthly income:

  • Interest rate: The interest rate on non-cumulative FDs might be slightly lower than cumulative ones.
  • Liquidity: While you receive regular income, the principal amount remains invested until maturity.

• 6. Fixed Deposits for Retirement Fund

  Retirement planning demands a strategic and disciplined investment approach. Incorporating FDs for retirement into your financial plan can help build a reliable retirement corpus. By staying invested in FDs for an extended period, you can ensure a consistent and stable income stream during your retirement years.

  Important points to remember while investing in fixed deposits as a retirement corpus:

  • Start early: Begin investing for retirement as soon as possible.
  • Diversification: Consider other investment options along with FDs for a balanced portfolio.
  • Choose Tenure Wisely: Pick an FD tenure that best suits your financial requirements. For instance, if you want a steady flow of monthly income, choose the monthly payout option.

• 7. Fixed Deposits for Wedding Expenses

  Planning for wedding expenses requires a solid financial strategy. Investing in an FD for wedding expenses can be a useful method to grow your savings over time. This ensures you have the necessary funds when the big day arrives. By investing in FDs, you can create a dedicated financial reserve to cover wedding-related costs without financial strain.
  At Shriram Finance, we understand your financial needs, especially during a wedding. Our FD provides one of the highest interest rates of up to 8.15%* p.a., inclusive of 0.50%* p.a. for senior citizens and 0.05%* p.a. for women depositors, making it an important investment for a wedding.

  Key points to consider when investing in fixed deposits for wedding expenses:

  • Start early: Begin saving as soon as possible to stay invested over a long tenure.
  • Choose a suitable tenure: Match the FD tenure with your wedding timeline.
  • Consider inflation: Please be sure to take account of inflation while setting your savings goal.

• 8. Fixed Deposits for Children

  Securing your children’s future involves making thoughtful financial choices. FDs for children offer a dependable and low-risk method to grow your savings over time. By investing in FDs, you can build a stable financial foundation for your children’s education, milestones, or other important needs as they grow. To achieve your goals, you can invest in Shriram FD, which offers one of the highest interest rates of up to 8.15%* p.a., inclusive of 0.50%* p.a. for senior citizens and 0.05%* p.a. for women depositors.

  When investing in fixed deposits for children, please remember to: 

  • Choose a tenure that aligns with your child's milestones, like higher education or skill development.

• 9. Fixed Deposits for Home Expenses

  Managing home expenses requires careful financial planning. FDs for home expenses provide a steady way to grow your savings, ensuring you have the funds necessary for renovations, repairs, or other significant home-related costs. Our FD helps you grow your savings for home expenses with one of the highest interest rates of up to 8.15%* p.a. (inclusive of 0.50%* p.a. for senior citizens and 0.05%* p.a. for women depositors.

  Here are some key aspects to consider while investing in fixed deposits for home expenses: 

  • Define your goals: Identify specific home expenses, such as renovations or repairs, to tailor your FD investments.
  • Tenure selection: Choose an FD tenure that aligns with when you’ll need the funds.
  • Liquidity needs: Consider having a mix of short-term and long-term FDs to balance growth and access to funds.