In order to invest a sizable sum of money safely, a fixed deposit account is one the useful tools. This is primarily because the return on the deposit is guaranteed, and the interest rate is not affected by market fluctuations.

In addition, investments in an FD are not a hassle anymore, primarily with the availability of online options.

Ways to start your FD investment

It’s easy to start working toward your financial independence by opening a fixed deposit account. A person can open an FD account with any bank, either in person or online. So, read on to learn more about it.

Starting a fixed deposit using net banking

1. Visit your bank’s online banking portal.
2. Enter your username & password to log in.
3. You need to locate the option labelled “Open Deposit Account,” “Open a Fixed Deposit Account”.
4. Complete the form by including the nominee’s name, address, account number and other details.
5. Pay the investment amount.
6. Once the funds are debited, you will get a confirmation of your investment.

Opening a fixed deposit via an app

Note: This facility is only possible if your bank has a mobile app. 

1. Download your bank’s app.
2. Enter your credentials and log in.
3. You need to locate the option labelled “Open Deposit Account,” “Open a Fixed Deposit Account”.
4. Select the repayment period and the total amount.
5. Authorise the fund’s transfer from your savings account to your FD account.
6. You will receive the confirmation after that.

Opening an FD account by visiting a bank

Besides online, you can apply for an FD by visiting the nearest branch of your preferred financial institution.

1. To start the process, you first need to get a form; you can do that by visiting the nearest branch or downloading it online.
2. After that, fill out the details like name and other personal details along with the existing account details from where the funds will be transferred or deposited following the maturity. Make sure you have complete information about your nominee.
3. Show the application to a financial institution representative and make the required changes if needed. After that, submit it.
4. Be sure to have the required funds available to make the FD payment.
5. You can get a copy of the investment at the bank branch, and you will also get it via email.

Features of a fixed deposit account

Millions of investors have used FDs as a means of financial security and growth for decades. Let’s learn more about FDs and dispel any lingering confusion by exploring their salient characteristics.

– Convenient to operate

Have you considered increasing the FD’s term or principal amount or switching out the nominee? Both the bank’s mobile app and the internet banking facility make it simple to include these directives and parameters.

– Customisable

Any sum you like can be put into an FD, which could be as low as Rs.5,000 or as high as several crores. Moreover, you can select the investment tenure that suits your needs.

– Insured savings

The Deposit Insurance and Credit Guarantee Corporation (DICGC) will cover any losses up to Rs.5,00,000 should something happen to your FD.

– Easy liquidity

In the event of a severe financial crisis, an FD will be there to help you out. You can easily liquidate your fixed deposit and use the funds for many purposes. If you cash out the FD before it matures, however, you may lose some of your earnings and have to pay a penalty charge.

– Tax benefits

The income tax benefits are another significant advantage of FDs. As per the 80C of the IT Act, you can get up to Rs.1.5 lakh deductions. However, remember that the income you generate from the fixed deposit interest rate is taxable.

Bottom Line

Now that you know the advantages of a fixed deposit and the procedures required to open one, you need to find a financial institution that will offer you the best benefits for opening a fixed deposit account.