Top 10 Things to Know If You Have Invested in a Fixed Deposit

  • Deposit
  • 27 Days ago

Written by - Shriram

Did you know a fixed deposit has a lock-in period? Did you know you can take a loan against a fixed deposit? Did you know you can save taxes with a fixed deposit?

The above questions are the most basic information about a fixed deposit. However, many investors are clueless about what a fixed deposit can offer.
A Fixed Deposit (FD) is one of the primary investment choices for investors. Although it has been in the investment market for a while now, there are still individuals who are not really aware of what a fixed deposit is and the top benefits of an FD as an investment. Some people make a considerable investment without knowing its extensive rules and regulations.

When you book an FD with Shriram, you will be given complete knowledge and awareness about a fixed deposit, its rules and regulations, features and benefits. So, if you are still unaware, this article will enlighten you with the top ten things you should know if you have invested in a fixed deposit.

What is a Fixed Deposit Investment?

A fixed deposit is an investment option that allows people to deposit a considerable amount of money into a deposit account for a fixed period of their choice at a fixed interest rate determined by respective financial institutions. Banks and Non-Banking Financial Companies (NBFCs) are the two most common financial institutions that accept a fixed deposit investment and provide you with the facility to open a fixed deposit account online or offline. The increase in usage of the internet has made young investors leverage the online platform to open a fixed deposit account quickly and seamlessly.

The fixed deposit account offered by NBFCs is called corporate or company fixed deposit. A company fixed deposit offers higher FD interest rates compared to a standard fixed deposit from banks. The rules and regulations also change as RBI manages the bank FD, and a company fixed deposit is regulated by Section 58 A of the Companies Act, 2013. NBFCs like Shriram offer a highly lucrative fixed deposit interest rate in India at up to 8.75% per annum (p.a.), including 0.50% for senior citizens.

Top 10 Things You Must Know If You Have Invested in a Fixed Deposit

Making a fixed deposit investment is one of the smart decisions because it offers excellent benefits and adds value to your portfolio. Besides knowing the sum of assured returns, one can plan future financial goals accordingly. Here are the top ten critical features you must know if you have already made an FD investment in India.

Fixed Deposit Receipt – FDR is a Fixed Deposit Receipt. It is a certificate provided by banks and NBFCs while opening a fixed deposit account. A fixed deposit receipt will include personal details of the investor, type of fixed deposit, maturity amount, interest rate, nomination details or other charges (if any). You can apply for an FD to receive the FDR.
 
  1. FD Helps You Save Taxes – Making a fixed deposit investment can help you save taxes. A standard fixed deposit will allow you to save TDS on the interest amount of up to Rs. 40,000 for investors below 60 years and Rs. 50,000 for senior citizens. If you want to save a higher amount of tax, you can try a tax-saving fixed deposit because you can save up to Rs. 1.5 lakhs per annum under Section 80C of the Income Tax Act, 1961.
  2. Auto-Renewal or Auto-credit after Maturity – Do you know what happens to your fixed deposit after maturity? Banks and NBFCs commonly auto-renew your FD or credit the maturity amount to your bank account. The depositor needs to select an option at the time of booking an FD. 

        Shriram offers auto-renewal and auto refund options where you can

  •  Renew your principal amount on maturity at an additional interest rate of 0.25% per annum.
  • Renew your interest amount on the maturity date.
  • Close your fixed deposit at the maturity date.
  1. Withdrawal After Death – If any unfortunate event like a death occurs to the investor, nominees can withdraw or continue the fixed deposit until maturity. However, the nominee should provide the fixed deposit receipt to take control over the fixed deposit account or withdraw funds from the FD account after the investor’s death.
  2. Nominee Details – When you open a fixed deposit account, you can add your family members or close relatives as nominees. It would help if you did not forget to inform the nominee. During unfortunate events like death, the nominee will be the caretaker of the account until the legal heir claims the maturity account.   
  3. Interest Rate – When you open a fixed deposit account, your interest rate on an FD will be fixed and remains the same throughout the tenure. Hence choosing an NBFC like Shriram is the best investment choice because Shriram offers one of the highest FD interest rates of up to 8.75% per annum, including an additional interest rate of 0.50% for senior citizens.
  4. Premature Withdrawals – You can make premature withdrawals from your fixed deposit during emergencies. However, you need to pay a small percentage as a penalty. So open an FD with a bank or NBFC with a lower penalty percent or zero penalties.
  5. Sweep-in Facility  – One of the best ways to double your investment is by choosing a sweep-in fixed deposit. The sweep-in facility seamlessly transfers excess funds above the threshold limit from your savings account to your fixed deposit account. A sweep-in fixed deposit also helps you earn higher returns on the surplus amount from your savings account and withdraw funds from your FD without any fees or penalties.
  6. Lock-in Period – All the fixed deposit accounts will have a lock-in period until which you cannot withdraw or break an FD. Respective banks and NBFCs generally set lock-in periods. With Shriram, your fixed deposit account is locked in for three months, after which you can make withdrawals.
  7. Rules and Regulations of an FD – You must know the basic rules and regulations of a fixed deposit and adhere to them until maturity. Following the rules will help you can receive the fullest benefit of an FD with assured returns.

Book an FD with Shriram

Now that you have answers to most of your questions regarding a fixed deposit account, it is time to open an FD with Shriram. An FD investment with Shriram assures safety, higher interest rates, flexibility, and guaranteed returns. So invest now with Shriram to grab attractive interest rates of up to 8.75% per annum and build a profitable investment portfolio.

FAQs

How does a fixed deposit work?
A fixed deposit is an investment instrument offered by banks and NBFCs to help investors deposit a considerable amount for a fixed tenure and earn good returns at maturity. NBFCs like Shriram allow you to invest funds for a tenure between 7 days to 5 years in a fixed deposit. However, the interest rate is determined based on the tenure of the funds.

What should I look for in a fixed deposit?
When you invest in a fixed deposit, the most essential feature you have to look for is the rate of interest at which the respective bank or NBFC offers a fixed deposit. Shriram offers one of the highest fixed deposit interest rates of up to 8.75% per annum, including 0.50% per annum for senior citizens.

When should we invest in a fixed deposit?
There is no specific time or financial institution for investing in a fixed deposit. However, when you choose an NBFC like Shriram over a bank, you are assured of getting higher and more profitable returns at maturity.

Key Highlights

  • A Fixed Deposit (FD) is one of the primary types of investment, but there are still many people who are not really aware of what a fixed deposit is and the top benefits of an FD as an investment.
  • When you book an FD with Shriram, you will be given complete knowledge and awareness about a fixed deposit, its rules and regulations, features and benefits.
  • An FD investment with Shriram assures safety, higher interest rates, flexibility, and guaranteed returns.
  • Knowing the rules and regulations of a fixed deposit will help you plan your future goals accordingly.