A Guide On Procedure And Formalities For Opening A Fixed Deposit Account

Fixed Deposits (FDs)  are the safest and simplest investments you can make. An FD keeps your money for a predetermined time and over this time, your money earns interest. You receive the deposited sum and the interest earned when the investment matures. Each institution has a different rate of interest for an FD. The tenure to keep your money in an FD is a minimum of 7 days and a maximum of 20 years.

Banks provide a variety of Fixed Deposits to their customers. You can meet your needs and objectives by choosing the suitable type of FD. Read this article to know the procedure for opening a Fixed Deposit account.

Here is the procedure for opening a Fixed Deposit account.

With the expanding world of technology and the internet, now it is simple and efficient to open an FD account online. Customers are not subject to any time constraints when completing the application form. Check out the steps below and learn how to open a Fixed Deposit account.

  • Visit the bank’s official website to open an FD account online.
  • Use your credentials, register a new account or log in if you already have one.
  • Choose “Fixed Deposit” as your option.
  • Type in the needed information, such as the amount and tenure.
  • Make sure everything you entered is correct, then click “Confirm.”
  • Make a payment using net banking.
  • Make sure to download the receipt for the Fixed Deposit for future reference.

What are the Required Documents for Fixed Deposit Opening?

The paperwork needed to open an FD account is listed below:

For Existing Customers:

You will only need to produce some of the required paperwork when you start an FD with your bank. An existing savings account with the bank would be enough to start an FD. 

For New Customers:

You will need a copy of your KYC documents and most recent passport-sized photos. The KYC proof includes a PAN card, Aadhaar card, driver’s licence and Passport.

Key Reasons To Open FD Account Online

Millions of Indians have used FDs as a standard saving and investing tool for many years. Let’s understand FDs better. 

Customisation: You can choose the amount you wish to deposit in the FD. It could be as little as Rs. 5,000. And you are free to select any tenure that you find comfortable.

Assurance savings: The (DICGC) will insure your FD up to a maximum of Rs. 5,00,000.

Add-on Benefit for Senior Citizens: Senior citizens are eligible for certain interest rates and tax exemptions for Fixed Deposits, which regular account holders are not.

Fixed Deposit (Cumulative): You can invest money and receive enticing interest payments. You make a lump sum investment with a defined tenor and interest rate on the principal. You will receive your entire investment plus interest income at the predetermined rates.

The interest is compounded every three months after the FD expires. The amount is credited to the customer’s primary account. 

Fixed Deposit (Non-Cumulative): For non-cumulative FD, customers can choose monthly, quarterly, or other interest payment options. The Fixed Deposit interest will then be instantly credited to the customer’s account.

Simple liquidity: If you find yourself financially bound, your FD will save the day. You can instantly liquidate your FD and use the money for any necessity you may have.

Obtain a loan against an FD: You can obtain a loan with your FD savings. It serves as security for your loan. Depending on the terms and restrictions of the lending institution. You may borrow up to 95% of the FD amount.

Results that are Always Guaranteed: Fixed Deposit returns are guaranteed and never subject to market volatility.

Flexible Tenures: Customers can choose an FD investment length between 7 days and 20 years based on their financial needs and goals.

Final Note

The procedure for opening a Fixed Deposit account is seamless and quick. You can invest money and receive enticing interest payments with a Fixed Deposit. In an FD and make a lump sum investment with a fixed tenure and interest rate.

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