What is a Top-Up Fixed Deposit (FD) & What are its Benefits?

Posted on Monday, May 27th, 2024 | By IndusInd Bank

Fixed Deposits (FDs) are investments where people can put a large part of their extra savings and see their wealth grow steadily. It is a popular investment option, but many are unaware that this unique investment option offers yet another feature called the top-up fixed deposit. If you are looking for ways to further enhance returns without letting go of the safety of a conventional FD, a top-up fixed deposit is the perfect choice: 

What is a Top-Up FD? 

A top-up fixed deposit (FD) feature allows existing FD holders to add more funds to their FD accounts without opening a new FD. Essentially, it enables individuals to increase their investment in an existing FD, usually at the prevailing interest rates offered by the bank. This feature provides flexibility and convenience for investors who want to boost their savings without the hassle of opening multiple FD accounts. It’s a convenient way to maximise returns on existing FD investments. 

Also Read: How To Book A Fixed Deposit (FD): 3-Step Guide 

How Can You Avail the Top-Up FD Feature? 

To avail of the top-up FD feature in India, you typically need to follow these steps: 

• Contact your bank: Reach out to your bank where you hold the existing Fixed Deposit account. 

• Inquire about top-up FD: Ask the bank representative about their top-up FD feature and the terms and conditions. 

• Provide additional funds: If the bank offers the top-up FD feature, you’ll need to provide additional funds to increase your existing FD investment. 

• Confirm interest rates: Confirm the prevailing interest rates for the top-up FD with the bank. 

• Complete necessary paperwork: Fill out any required forms or paperwork provided by the bank to initiate the top-up FD. 

• Monitor your investment: Once the top-up FD is processed, keep track of your investment and the interest earned on the increased amount. 

By following these steps, you can easily avail the top-up FD feature offered by banks in India. 

What are the Top Benefits of Top-Up FDs? 

Although investing in a top-up FD has many benefits, here are the top three ones that you should absolutely know about as an investor. 

Higher Interest Rates: Invest more money at higher FD interest rates during renewal. 

Flexibility in Top-Up Amount: Choose the top-up amount convenient to you. 

Digital Process: The top-up process is purely digital. 

Is Top-Up FD a Good Choice? 

Using the top-up feature can help enhance returns on surplus funds. This is beneficial when you have a lump sum to invest. Also, it’s advantageous for aligning the FD investment with specific financial goals, like education or home purchase. 

Also Read: Benefits of Tax Saving FDs Under Section 80C of the Income Tax Act 

FAQs: 

When can I avail the Top-Up FD feature? 

• The top-up FD feature can be availed within 30 days before the FD maturity date. 

Can I modify the top-up amount? 

• Once the top-up FD feature is availed, the top-up amount cannot be modified. 

What if I have an insufficient balance in my Savings Account on the FD maturity date? 

• If your Savings Account has an insufficient balance on the FD maturity date, the FD will be auto-renewed with the maturity amount. 

Will I get the benefit of a top-up if I have opted for an FD auto closure? 

• If you’ve set the FD instruction as auto closure on maturity after topping up the FD, the FD closure proceeds get credited to the Savings Account on the maturity date, without the top-up amount getting debited. 

To sum it up, the top-up FD feature offers investors in India the opportunity to enhance their savings and maximise returns conveniently. With higher interest rates, flexibility in top-up amounts, and digital accessibility, this feature is valuable for those seeking to optimise their investments and achieve their financial goals. 

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.