Everything you need to know about a Long-term Fixed Deposit

  • Deposit
  • 19 Days ago

Written by - Shriram

A long-term Fixed Deposit (FD) has many advantages making it a popular form of investment. With a long-term FD, you can get higher interest rates. Senior citizens can make the most out of it when they invest in a financial institution that offers additional interest for the elderly. You can also use your long-term FD as a security deposit to apply for a credit card, and the returns on such a deposit are assured, making it one of the best available schemes.

A fixed deposit is one of the most popular investment schemes. It is because they offer assured returns and have various features that can make investing straightforward. FDs are generally provided by banks or Non-Banking Financial Companies (NBFCs).

Shriram offers higher interest rates on an FD with assured returns. You can invest your money easily with just a few clicks with Shriram's online fixed deposit application facility . You can also use the Shriram FD calculator  to know how much interest you can get upon maturity for an investment of your choice.

It is a great investment scheme for individuals without experience in investing and who want to start their savings journey. However, there are several things you need to consider before you begin investing. Let's explore some factors you must consider while applying for a long-term fixed deposit.

Features of a Fixed Deposit

  • Secure Investments:
Most investments are subject to change as per market fluctuations. A fixed deposit is booked at a predetermined interest rate and will not be impacted by any changes happening in the market. After the deposit is matured, the interest rate will be revised when you renew or start a new FD.
 
  • Flexible Tenure and Renewal:
Generally, an FD can be booked for a minimum term of 7 days and can go on up to a maximum of 10 years. The choice of tenure is up to your preference at the time of opening the FD. The renewal of an FD upon maturity can also be done on maturity. Check the interest rates before reinvesting to ensure you get the best for your investment.
 
  • Rate of Interest:
The interest rate on an FD depends on the principal amount and the tenure you select for your deposit. Usually, the interest rates will be higher for long-term FDs and lower for short-term FDs. You can look at the Shriram interest rates to know how much you can get for your deposit.
 
  • Tax Deductions:
The interest earned on a fixed deposit is fully taxable under the Income Tax Act, 1961. You can invest in a tax-saving FD to exempt yourself from taxes. However, a tax-saving FD has a fixed tenure of five years.

What is a Long-Term Fixed Deposit?

A long-term fixed deposit means an investment that may range between 5 years to 10 years or more. In the past, a Fixed Deposit was considered a long-term investment. With the advancement of technology and new investment options, a short-term FD is just as popular as a long-term FD. The online process of opening an FD makes it more convenient for you to invest your money and earn more interest. Check one of the most trusted NBFCs, Shriram, to know the interest rates you can get for a long-term FD.

Senior citizens can make the most out of long-term FDs as they can get additional interest over the standard interest rate. With a Shriram FD, you can get interest rates up to 8.40% per annum, which includes the additional interest of 0.50% per annum exclusively for senior citizens.

Advantages of a Long-Term Fixed Deposit

  • A long-term fixed deposit will help you meet your future financial goals.
 
  • It is an excellent way to save your hard-earned money instead of leaving it in a savings account where it will earn a lower interest rate.
 
  • The longer the deposit, the higher the interest rate you can get on the fund. Some banks and NBFCs also offer competitively higher interest rates for long-term deposits.
 
  • It is an ideal option for senior citizens as the rate of interest paid is much higher for this age group.
 
  • A loan can be availed on the FD for a much lesser rate when compared to a personal loan.
 
  • A long-term deposit can be used as a security deposit to apply for a credit card.
 
  • You can also use it for overdraft facilities. An overdraft is a facility offered by banks or NBFCs wherein you can sweep-in/transfer your money from the savings account to your fixed deposit account.
 
  • There is no risk factor as the returns are assured.

Eligibility to Apply for a Long-Term Fixed Deposit


Here is a list of documents and eligibility criteria you will require to open a long-term fixed deposit account:
   
  • You must submit identity proof like a passport, Aadhaar Card, PAN (Permanent Account Number) Card, Voter ID, or any other government-approved identification.
 
  • Address proof documents will also be required. Telephone bill, electricity bill, bank statement with cheque, or any other evidence you have can be submitted to apply for a fixed deposit.

How to Apply for a Long-Term Fixed Deposit?

The process of booking a long-term fixed deposit is very similar to the regular fixed deposit. You can apply online or visit the NBFC/bank branch near you and complete the application process. It is highly recommended to compare the interest rates before booking the FD. Click here to check the interest rate of Shriram Fixed Deposit.

Conclusion

A fixed deposit is a fantastic option to help you inculcate a healthy savings habit. You can get higher interest rates and assured returns with a long-term fixed deposit. Now that you have a clear idea of how a long-term FD works start your investment journey today!

Open a Shriram Fixed Deposit to invest for a better and more secure future. You can rest easy knowing that you will get assured returns upon maturity of your deposit. If you wish to withdraw or renew your Shriram FD, it can be done in just a few simple steps. So invest in a long-term FD scheme now to ensure you fulfil your future goals.

FAQs

1. Is an FD good for long-term investment?

Yes, a long-term FD investment is a good investment tool as it will significantly give you higher interest rates.

2. What is the maximum tenure for an FD?

The maximum tenure for a fixed deposit is ten years.

3. Will the FD interest rates increase in 2022?

The interest rates on a fixed deposit are subject to change regularly and cannot be accurately predicted. However, Shriram offers an 8.40% interest rate on fixed deposits.

4. What are the FD interest rates?

A fixed deposit interest rate is the fixed interest you can get for a deposit over a predetermined period.

Key Highlights:

  • Investing in a long-term FD can get significantly higher interest rates.
 
  • Senior citizens can earn more interest on a long-term FD if their NBFC/bank offers additional interest for the elderly.
 
  • You can use a long-term FD as a security deposit to get a credit card.
 
  • Many NBFCs/banks offer assured returns, which means there is no risk factor involved.