A fixed deposit is offered by banks, NBFCs, and also the post office. If you have a lumpsum amount and are looking for a safe basket to invest this money in – there is no better option than an FD. This is especially true when you can’t afford to take any risks.
Because an FD is the most risk-free investment option as it has a fixed interest rate that will not fluctuate. Also, there are so many more pros to investing in an FD.
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What is an FD?
An FD is also called a term deposit. Let us understand it in depth. A fixed deposit is when you have a lump sum amount and want to lock it in for a period. While it is locked in, you do not want your money to just sit but also earn some amount of interest on it. This is when you utilize the FD.
Also, you need to know that every bank or NBFC fixed deposit interest rates are different. Some could offer you a 6% interest rate, and some could offer you an 8% interest rate. And it is your job to know which offers you the best.
Let us look at it with an example. Assume you choose to invest in Indusind Bank Fd, and it will be your duty to know the Indusind Bank Fd Interest Rates for different time horizons.
Well, there are several benefits to an FD; you can find them by just knowing its characteristics of it. You will know if the FD is the right investment for you when you get to know what the scheme has to offer for you. After we look at the characteristics – let us get to know how to open an FD account.
Characteristics of a Fixed Deposit
A fixed deposit has the following features:-
- A fixed deposit has the term from 6 months all the way to 10 years. You can select a tenure that suits you the most. If you choose a tenure of a year and you want to withdraw before the fixed tenure – you can withdraw it prematurely but with a small penalty.
- An FD can be used as collateral for a loan. If you are applying for a Fixed deposit and you want a loan, you can always use the FD to apply for a loan. You can get a loan against an FD for up to 90% of the amount.
- Senior citizens have greater benefit from this scheme than ordinary citizens. They have higher interest rates.
- An FD has no risk like stocks and more; they offer a fixed return. So, if you have a low-risk appetite – you can always choose this option.
- You will also have tax benefits through this scheme, so along with all of the other benefits – you also have this benefit to enjoy.
Now, if you feel this FD is meant for you and your financial goals – you can open an FD account instantly. Here is how you can do it.
How to Open an FD Account?
Opening an FD account is not as hard as it seems. You can do it right from where you are, and if you are not comfortable with doing online – you can also do it offline. Let us learn them both here.
Do it online, follow the below-mentioned steps.
- Choose a bank or NBFC that you want to start your FD in.
- Find the bank’s application and download it.
- Sign in to the mobile application and look for the FD option on the app.
- Click on apply and enter your details with KYC.
- Now deposit money into your newly created FD account.
Do it offline now; the steps are right here.
- You can go to the bank or NBFC office that you choose to invest in.
- Ask for an FD application form.
- Once you get that, you can fill it in completely. With all of the needed documents attached.
- You can now submit the form with the amount you want to deposit into the FD.
It is as simple as that, don’t you think. But also remember that you need a certain document before you can start. Those documents involve your address proof, your photo proof, and a way of deposition into the account. You need to make sure that all of your details are up to date and relevant to make things much easier.
The FD will match your goals if you are okay with it being locked in for a specific period of time. Also, you would never have to worry about your money not growing since, through an FD, your money works for you.
Now you know all of the features of an FD and all of the perks it has in store for you. You can now easily apply for a fixed deposit – online or offline. But, just make sure that you do your part of the research on the interest rates of the schemes.