What is a Fixed Deposit Account? How to Create Online?

The biggest challenge about saving money is “how to get started?”. While you cannot control the economy, you can manage your money. “Do not save what is left after spending, but spend what is left after saving,” said Warren Buffett, Chairman and CEO of Berkshire Hathaway. So, this guide will help you understand a Fixed Deposit (FD) and simple ways to book an FD online to enjoy savings.

Fixed deposit is the most popular and trusted investment because it offers an assured rate of return, easy liquidation and much more. So, what is a Fixed Deposit?

What is a Fixed Deposit?

An FD is an investment option offered by banks and NBFCs (Non-Banking Financial Companies) to help customers save money. It is a savings scheme in which a sum of money is invested for fixed interest and tenure agreed upon between the depositor and banks or NBFCs.

Although the depositor solely decides the tenure (7 – 14 days to many years), the fixed deposit interest rates (varies across banks) are determined by the respective banks and NBFCs. The depositor will receive a lump sum amount and interest by the end of tenure.

A fixed deposit is also known as a term deposit. You are guaranteed to get a lump sum with a stable interest rate that does not fluctuate irrespective of the economic conditions.

Top 5 Benefits of Fixed Deposit

A fixed deposit benefits depositors in many different ways. These benefits will motivate you to choose a fixed deposit and enjoy the lump sum returns. Here are a few benefits you must know if you are ready for an investment.

1. Assured Returns

One of the significant reasons people invest in an FD has assured returns. Unlike other investment options, an FD is the safest and restricts the loss of money in case of market fluctuations. Besides, your principal amount stays secure, and the returns are higher than other savings accounts.

2. Flexible Tenures

An FD offers you the flexibility to choose the tenure of your investment. You can choose between 7 days to 10 years as per your necessity. Although each bank has different tenure rules, the final decision is of the depositor to select the suitable plan.

3. Rate of Interest

The interest rate on a fixed deposit is higher than you can earn on your savings accounts. However, it only varies depending upon the tenure of the deposits. It is essential to understand that FD schemes offer a 0.50% additional interest rate for senior citizens. 

4. Easy Liquidation

Liquidation is simple and hassle-free in fixed deposit accounts. You can either do it online or visit the branch and fill out the form for liquidation. However, in emergencies, if you decide to withdraw/break the fixed deposit, you will lose interest levied towards the pending tenure of an FD. 

5. Loan against Fixed Deposit

An FD is the only dependable investment that offers an option to take a loan against it during critical times. Depending on the banks, depositors can take loans up to 95% keeping their fixed deposit as collateral.

How to Create a Fixed Deposit Account?

Opening/creating a fixed deposit account is simple than you imagine. It would be best to decide on the bank/NBFC according to the fixed deposit interest rates. After which, you can drop by any nearby branch or follow the process online. Continue to read if you want to know how to open an FD account online and offline.

Open Fixed Deposits Online

Opening an FD online is easier and quicker compared to offline. You have to log in to your banking or NBFC home portal, follow the instructions, and fill in the necessary details like nominee name, address, associated bank account number etc. Once you complete the process, you will have an FD account for yourself.

Open Fixed Deposits Offline/Branch

Opening a fixed deposit account by visiting a branch is easy if you hold an account in the respective bank. Contrarily, you must first open a savings account and proceed with the FD account opening. However, if you are already a customer, you must fill out the FD application form and submit it to the branch. 

How to Calculate Fixed Deposit using Shriram’s Online FD Calculator

Calculating your FD before investing gives you an overview of how your finance will look in the future upon investment. Moreover, it allows you to choose your preferred tenure and investment amount and find the results accordingly. Here’s a step-by-step guide on calculating fixed deposits using Shriram’s Online Fixed Deposit Calculator.

·     Enter the investment amount and tenure in the Shriram Fixed Deposit calculator.

•      Click on the calculate button.
•      You can find the maturity returns for cumulative schemes and the accumulated interest.
•      Quickly estimate the interest rates for the chosen investment tenure in non-cumulative schemes.

Which is the Best Bank or NBFC for Fixed Deposit Investment?

Many banks and NBFCs in India offer attractive interest rates for FDs. However, Shriram Fixed Deposit is one of the best credible NBFCs that offer the highest returns. Below are a few points that differentiate them from other banks and NBFCs in India:

•         Highest returns in the market. Up to 8.40%
•         Rated “IND AA+/Stable” by India Ratings & Research
•         Additional 0.50% returns for senior citizens (included)

So, considering these features, Shriram finance is the best choice to invest in and secure your future for a lifetime.

Go Ahead and Invest Now:

After looking at the benefits of fixed deposits and the simplicity of the investment process, it is clear that an FD is an instrument that is risk-free and simple. If you are a person who does not have a risk appetite, an FD is just for you. Although the earnings are limited, you are guaranteed to get a stable income amidst any market instability. Begin your journey to better savings. Invest now!