Banks are the trusted option to store money. They ensure that your funds are easily accessible and enable wealth growth and management. When Bank Accounts came into existence, people heaved a sigh of relief as they found a haven for their funds. Along with them came other traditional banking products which are popular even today. Besides a Savings Account, you can also open a Fixed Deposit at any bank registered with the Reserve Bank of India.
It earns attractive interest income and the lumpsum investment route is popular. You invest an amount for a set tenure and earn interest at a fixed rate.
Is it safe?
FDs are a trustworthy option for all investors as it remains unaffected by market fluctuations. You receive the decided interest income. Besides, all banks offer Deposit Insurance under the Deposit Insurance and Credit Guarantee Corporation scheme that offers a cover up to Rs. 5 lakh.
Online opening process
You can open the Term Deposit Account online nowadays. With the technological advancements in the banking sector, it has become hassle-free to select the bank, deposit amount, interest, and tenure on the Banking app. Register with your bank by entering the username and password. Select the appropriate option and enter the details as requested, including the deposit amount, tenure, interest, and type.
Upload the required documents for facilitating the account opening process. You need to cross-check all the details before submitting them and pay the deposit amount through the app. You receive an email and SMS notification upon successfully opening the account.
Minimum amount and tenure
The minimum amount for an FD is Rs. 5,000. The tenure ranges from a few days to five years. While you invest in a lump sum, ensure you have enough money to meet other essential requirements without prematurely breaking the deposit. Premature withdrawals attract a penalty of 0.5% to 1% of the interest rate.
Eligibility
You need to follow the eligibility criteria for opening Term Deposits, like a minimum deposit amount, resident status, like Indian residents, Hindu Undivided Family, and non-resident Indians and employment statuses, like sole proprietorships, companies, partnership firms, clubs, family trusts, associations, and societies.
Another popular traditional investment is the Recurring Deposit Account, where you invest small amounts regularly without causing a financial burden. These provide attractive interest rates and are accessible online.
Documents required
The documents needed for opening an FD Account include identity and address proofs, like the Aadhaar, Voter ID, PAN card, driving license, passport, etc. Upload them if you are a new customer. For existing ones, the process becomes easier as the bank already has all your details. Senior citizens get higher interest than other depositors and other benefits. You skip the lengthy documentation process and frequent bank visits since everything is automated and paperless.
Keywords: Fixed Deposit, FD, FD Account
