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Types of Fixed Deposit Schemes You Can Choose From Online
There are 3 main types of fixed deposits available from a bank online:
- Simple Fixed Deposit - The interest rates vary depending on the bank but generally the tenures for simple fixed deposits are anywhere between a 7 days to 10 years.
- Special Fixed Deposits - These fixed deposits have a different calculation when it comes to tenures and are generally in denominations of days such as 300 days, 700 day or 1000 days.
- Tax Saving Fixed Deposits - As the name suggests, these financial products help you gain benefits on taxes under Section 80C, however keep in mind that the interest that you earn from a fixed deposit is fully taxable.
Top 5 Things You Need To Know Before You Make an Online Fixed Deposit
Here are 5 things you need to know and make sure of, before you opt for an online fixed deposit scheme from a bank:
- Go for A Fixed Deposit with a Long Tenure - The longer your tenure for fixed deposit, the more interest the bank is going to reward you with. So, make sure that, even if the amount payable every month is small, you pay them over a long tenure. Banks that are often well-known come up with special deposit periods to help enhance their ratio of deposit by offering special returns on specific tenures. Do look out for them.
- Choose A Bank with High Credit Ratings - When you want to get a fixed deposit from a bank make sure the bank has high credit ratings. This will ensure the safety of your bank and a rewarding experience when it comes to dealing with a bank. You can research that when researching fixed deposits online.
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- Look out for Additional Benefits - A lot of banks give you the advantage of getting a loan facility on fixed deposits when you are in urgent need of cash. Some banks may even offer insurances such as Personal Accident Cover as a free product for the customers.
- Liquidity or Premature Withdrawal of Fixed Deposit - You have to check the premature withdrawal clause of the FD as banks provide higher rates of interest generally, but the withdrawal fee may not be revealed. It is important to negotiate exit load on premature withdrawals and compromise the liquidity aspect. You can check out this clause online from the bank and then make your decision.
- Makes Sure Your Fixed Deposit Helps Your TDS Look Good - Once you have made an FD, you will declare the income through FD in the section Income from other Sources when you fill your tax returns. Under the Form 26AS the TDS payments deducted on your FD will be listed. This helps to make sure you save a little more on your taxes by treating your FD like a regular income.
Top 5 Reasons to Invest in a Fixed Deposit Online
Yet with so many things to ensure fixed deposit is a safe and secured personal investment method especially when you have it online. Here are the reasons, why:
- Online Advantage to Choose -It is very easy to apply for an FD online and one can do this through net banking or fill out an online application form. Many banks provide the facility to customers to open a term deposit online.
- Easy Payment Options - You can apply with the help of any digital payment options, be it credit card, ATM/ Debit Card and net banking. You can also link your bank account where the funds are pulled out automatically and you are simply notified about the payment.
- Additional Freebies - Some banks offer extra benefits when you apply for a fixed deposit online. This includes loan facilities in case of emergencies and insurance aids like personal accidental cover etc.
- Save On Taxes - Under the Section 80C of the Income Tax Act, of India, a fixed deposit investment of up to a maximum of Rs.100,000 for up to 5 years have eligibility for tax deductions. You can file the tax deduction information in your income tax returns portfolio online. The tax saving fixed deposits are especially good for saving money and tax at the same time.
- Safest Personal Investment - Though the returns or rates of interest that you are paid are not very high, it is safe against other options such as Gold or company equities. Banks offer enough security of your money if they institution is old and has a high credit rating.
So, what are you waiting for? Check out the wide variety of fixed deposit schemes offered on BankBazaar from different banks and financial institutions and choose the fixed deposit that suits your need, the best.
In India, most of the banks accept FD Invesment for a tenure of seven days up to 10 years. However, most of the Non-Banking Financial Companies (NBFCs) offer FDs for a minimum tenure of 12 months up to 1o years.
NRE fixed deposit stands for Non-Resident External Fixed Deposit. This category of FD is designed for NRIs and allows them to invest their onshore earnings in Indian bank accounts.
Yes, you can visit the issuing bank’s branch and apply to invest in FD.
The rules for withdrawing FD before maturity vary from bank to bank. Some banks do allow withdrawing FD before maturity while some banks charge a penalty for the same.
You can apply for tax saving FD to avail tax benefits.
Most of the banks do allow FD investment for three months. However, this completely depends on the FD issuing bank’s rules and regulation.
Yes, most of the banks accept NRI applications for FD investment.
Yes, most of the banks offer a special rate of interest on FDs for senior citizens.
Some banks do accept FD investment applications for minors with guardian/parent as co-applicants.
Yes, the minimum lock-in period for tax-saving FD is five years.
