What is a Fixed Deposit?
A Fixed Deposit, often abbreviated as FD, is a financial product offered by banks that allows you to deposit a lump sum of money for a predetermined period at a fixed interest rate. This interest rate is typically higher than that of regular savings accounts, making FDs an attractive option for individuals looking to grow their savings.
Fixed Deposit (FD) Interest Calculator
Advantages of Bank Fixed Deposits
- Assured Returns: One of the primary advantages of FDs is the certainty of returns. You’ll know exactly how much interest you’ll earn when you open the account, which can help you plan your finances effectively.
- Safety: Fixed deposits are considered one of the safest investment options. The deposited amount is insured, and it’s not subject to market fluctuations like stocks or mutual funds.
- Flexibility: Banks offer various tenures for fixed deposits, allowing you to choose a time frame that aligns with your financial goals. Common tenures range from a few months to several years.
- Interest Payout Options: You can choose how you want to receive your interest earnings, whether it’s monthly, quarterly, or at maturity.
- Loan against FD: In case of an emergency, you can avail a loan against your fixed deposit without breaking it. This can be a convenient way to access funds without losing out on interest.
How to Create a Fixed Deposit Account
- Choose a Bank: Start by selecting a bank or financial institution that offers fixed deposit accounts. Research different banks to compare interest rates and terms.
- Visit the Bank: Visit the selected bank and meet with a representative in the bank’s customer service or savings department.
- Provide Identification: You’ll need to provide valid identification, such as your passport, driver’s license, or Aadhaar card, along with your proof of address.
- Select Tenure and Amount: Decide on the amount you wish to deposit and the tenure of your FD. Longer tenures usually offer higher interest rates.
- Fill out the Application Form: The bank will provide you with an application form. Fill in the required details, including your name, contact information, and the specific terms of your fixed deposit.
- Deposit Funds: Deposit the desired amount into your new FD account. You can do this via check, cash, or a transfer from your savings account.
- Collect Your Receipt: Upon successful completion of the process, you’ll receive a Fixed Deposit receipt that confirms your investment. Keep this receipt safe, as it’s essential for future reference.
Why Opt for an Online Fixed Deposit?
Before diving into the process, let’s understand why you might choose to open an FD online:
- Convenience: Online FDs can be created from the comfort of your home or office, eliminating the need for in-person visits to the bank.
- Time-Saving: You save time by avoiding long queues and paperwork, as the entire process can be completed with just a few clicks.
- 24/7 Access: Online FDs allow you to manage your investments at any time, 24/7, giving you complete control over your finances.
- Paperless: Many online platforms offer paperless documentation, contributing to a more environmentally friendly process.
How to Create a Fixed Deposit Online
- Select the Bank: Begin by choosing the bank or financial institution through which you’d like to create your Fixed Deposit. Ensure that the bank offers online FD services.
- Access the Bank’s Online Banking Platform: If you’re an existing customer, log in to your online banking account. If you’re a new customer, you may need to register for online banking services on the bank’s website.
- Locate the Fixed Deposit Section: Once you’re logged in, find the section that deals with Fixed Deposits or Term Deposits. It may be labeled differently on each bank’s website, but it’s generally easy to find.
- Select the Type of Fixed Deposit: Choose the type of FD you want to open. You’ll typically be asked to specify whether it’s a regular FD, a tax-saving FD, or any other specific type offered by the bank.
- Fill in the Required Details: You’ll need to provide details such as the deposit amount, the tenure of the FD, and the type of interest payment (monthly, quarterly, or at maturity).
- Upload Necessary Documents: If the bank requires any documentation, you may need to upload scanned copies of your identification and address proof documents.
- Review and Confirm: Before finalizing, review the details you’ve entered, including the interest rate and maturity amount. If everything looks correct, confirm the creation of the FD.
- Make the Deposit: Transfer the deposit amount from your linked savings account to the new Fixed Deposit account.
- Confirmation: After the funds are transferred, you will receive a confirmation email or message from the bank, which serves as a receipt.
- Monitor Your FD: You can monitor the status and performance of your Fixed Deposit through your online banking account.