Are you looking for an investment option that offers assured returns, flexibility of tenure, liquidity for goals and tax savings all in one? Opening an FD account digitally is now a breeze that offers the twin benefits of great interest rates plus a seamless experience.
Read on to learn how to quickly evaluate, apply and fund fixed deposits online while maximising your returns by choosing the right financial institution, tenure and interest payout option!
Why Choose Fixed Deposits?
Here are the significant benefits of parking funds in fixed deposits:
- Assured Returns: FDs offer guaranteed returns per the rates fixed when opening the account.
- Flexible Tenures: Invest for tenures between 7 days to 10 years based on financial needs.
- Low Risk: One of the safest investment options, ideal for conservative investors.
- Tax Benefits: Tax-saving FDs up to Rs 1.5 lakh qualify for deductions under Section 80C.
Steps to Open a Fixed Deposit Account
Here are the steps to open a fixed deposit account seamlessly and start earning assured returns:
1. Choose the Right Financial Institution:
First, compare Fixed Deposit interest rates and features across major banks and NBFCs. For instance, IDFC FIRST Bank offers competitive up to 7.9%+ interest on FDs and digital account opening. Also, check the minimum deposit amount and overall customer service ratings.
2. Visit the Bank’s Website or Mobile App:
Access the financial institution’s website or app to open paperless FDs in minutes. Then, go to the FD section and check the online application form to get an overview of the process.
3. Provide KYC Details:
Submit essential KYC documents like Aadhaar, PAN Card and employment details for verification. Make sure to have soft copies of the latest updated documents for a smooth onboarding process.
4. Select Deposit Amount and Tenure:
Determine the investment amount and lock-in period that align with your monetary goals. Before fixing tenure, factor in future income, liquidity needs, and financial plans.
5. Opt for Interest Payout Frequency:
Choose between monthly, quarterly, or cumulative interest payout options. Evaluate the reinvestment benefits versus liquidity needs before deciding on a suitable frequency.
6. Confirm and Fund Your FD:
Transfer the lump sum amount to open your online FD account instantly. Double-check account details before transferring funds via netbanking or UPI.
Tips to Maximise Returns with FDs
Follow these expert tips to earn higher interest on your fixed deposits:
- Compare Interest Rates: Check fixed deposit interest rates across public and private sector banks and NBFCs to find the highest returns. Also, the comparison is based on the minimum deposit amount and overall customer satisfaction.
- Choose Cumulative FDs: Opt for the cumulative payout option, wherein the interest earnings are reinvested. This accelerates returns through the power of compounding interest.
- Ladder Maturities: Split total investment into smaller FDs across different tenures to balance liquidity and earnings.
- Use Tax-Saving FDs: Open tax-saving FDs to save taxes up to Rs. 1.5 lakhs under Section 80C. Opt for 5-year tenures, ideal for long-term savings.
- Use an Overdraft Facility: Opt for an overdraft or OD facility against existing FDs to get liquidity instantly when needed without breaking the FD.
Conclusion
Opening and managing fixed deposit accounts online is now easy, quick, and convenient. By choosing the right financial institution, tenure, interest payout frequency, and using other tips covered, you can maximise returns on your hard-earned savings.
Fixed deposits offer attractive assured returns, flexibility of custom tenure, liquidity through overdraft, and tax savings. Evaluate all factors and invest smartly to grow your wealth safely.
