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How Does the FD Minimum Period Differ Across Various FD Types?
Posted on Saturday, October 28th, 2023 | By IndusInd Bank
The minimum periods and FD interest rates vary based on the specific FD type and terms provided by the bank or financial institution.
According to data from the RBI, there are 24.23 million FDs in India, valued at more than INR 103 trillion. This exceeds the total amount of INR 59.7 trillion held in savings accounts and INR 18.5 trillion in current accounts. Fixed Deposits (FDs) stand out as a dependable investment avenue because they provide consistent returns without the stress of market volatility. However, to maximise the benefits of your investments, you must plan and invest your money in the right kind of FD that supports your financial goals. Keep reading to explore various FD options and possible variations in their investment periods.
Different Types of Fixed Deposits
Have a look at some of the most popular FD types:
| Standard Fixed Deposit | A standard FD scheme where you can invest your money for a fixed tenure against an interest rate set by the bank or financial institution. |
| Tax-saving Fixed Deposit | With this FD, you can claim tax exemptions of up to INR 1.5 lakhs under Section 80C of the Income Tax Act. It has a 5-year lock-in period. |
| Senior Citizen Fixed Deposit | This FD scheme is designed for senior citizens aged 60 years and above. It offers an attractive interest rate compared to the standard rate provided to regular citizens. |
| Corporate Fixed Deposit | You can book a corporate FD with a company for a fixed tenure at a predetermined interest rate. The minimum tenure is 12 months. Private financial institutions and NBFCs offer this FD at a higher interest rate than banks or post office deposit schemes. |
| Cumulative Fixed Deposit | In this FD scheme, you receive your interest earnings upon maturity. The interest earnings are compounded and added to your initial amount. |
| Non-cumulative Fixed Deposit | With this FD scheme, you can select your preferred interest payout frequency, such as monthly, quarterly, half-yearly, or yearly. It is the best choice if you require regular interest income to cover your daily or recurring expenses. |
| Flexi Fixed Deposit | It combines the liquidity of a savings account and the interest rate of an FD. With this FD, you can easily withdraw funds or deposit extra savings because it is directly connected to your savings account. |
| NRI Fixed Deposit | Banks and NBFCs provide three types of FD schemes for NRIs: NRO, NRE and FCNR FDs. Each of these FD plans has different deposit currencies and tax rules. |
Minimum Period for a Fixed Deposit
The minimum term for an FD is the shortest period you can keep your money invested. It may vary depending on the FD type and terms provided by your preferred bank or financial institution. The minimum lock-in period for regular FDs can vary and ranges from 7 days to 10 years, whereas the lock-in period for special FDs, such as tax-saving FDs, is typically 5 years. Certain banks provide flexible FDs with shorter lock-in periods that allow customers to withdraw funds prematurely with a penalty. It is essential to understand the terms and conditions outlined by the bank or financial institution before investing in an FD. This ensures you are aware of any penalties or limitations related to early withdrawals.
Invest In an FD With IndusInd Bank
Booking an FD with IndusInd Bank is incredibly easy, and involves three simple steps. To get started, you will need a minimum deposit of INR 10,000. IndusInd Bank offers competitive FDinterest rates, starting at 7.50%, assuring steady growth for your investments. Additionally, you have the flexibility to select your FD tenure, which may be anywhere between 7 days and 10 years, and how often you want to receive interest payments: monthly, quarterly, half-yearly, yearly, or at maturity. Moreover, IndusInd Bank has an auto-renewal feature at maturity, plus you can choose a 5-year FD option to receive tax benefits.
Begin your journey towards financial security with IndusInd Bank FD. Book online and receive best-in-class fixed deposit interest rates!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
