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Open FD Account

FD Account Opening Criteria

Last Updated 01st Dec 2020

Criteria Minimum Requirement
Eligibility Indian resident, Non-Resident Indian (NRI), Senior Citizen, Minors, Sole proprietorship, Partnership firms, Companies, Societies, Clubs.
Documents KYC documents (identity proof and address proof)
Tenure 7 days to 10 years
Deposit Amount Minimum ₹ 100
Interest Rate 2.25% to 7.50%
Earn upto 6.95% on FD APPLY NOW

What is a Fixed deposit?

Fixed Deposit is an investment tool where investors invest a lump sum for a fixed tenure. The FD generates interest on the principal amount on a cumulative basis during the tenure. The popularity of this investment option is the greater amount of interest provided by it than other saving accounts. The interest rates on FD accounts may vary from one bank to another. FD investment can either be long-term or short-term based on the investment portfolio of the investors. Fixed deposit come with flexible tenures that may range from 7 days to 10 years. However, investors need to keep in mind that no premature withdrawal is allowed before maturity without financial repercussions.

Fixed deposits have been a trustworthy investment option for many due to its risk-free nature. Currently, multiple banks and non-banking financial companies, along with post offices offer the facility of fixed deposits. Investors can open fixed deposit account in the bank where they already have a savings account. Several banks allow investors to open FD account even if one does not have savings account with that bank. Opening and managing an FD account has become an easy task, especially with digitalization. Almost all FD account providers offer the benefit of online facilities. Once you have selected an FD account provider, you need to have a clear concept of the procedure to open a fixed deposit account.

How to Open a Fixed Deposit Account?

Investors can open fixed deposit account both offline and online.

Online Process

The advantages of opening an FD account online are easy and less time-consuming process, easy payment, renewal and closure. The procedure for opening a fixed deposit account online is mentioned below.

  • Visit the website of the bank or NBFC where you want to open the FD account.
  • Create a new ID or log in with an existing ID.
  • Select the open FD account option.
  • Provide necessary details (such as principal amount, tenure and nominee).
  • Confirm the details and make the payment via net banking.
  • Download the receipt for future reference.

The procedure to open a fixed deposit account may vary from bank to bank. The websites of various banks may have different types of options. For example, on the homepage of State Bank of India, you have to click on ‘Deposit Schemes’ and then select ‘Term Deposits’. On the other hand, on the homepage of HDFC, you have to select ‘Open Fixed Deposits’.

Offline process

Investors can open FD account in any bank of their convenience regardless of them being or not being an existing account holder. The procedure to open a fixed deposit account offline with or without an existing account is more or less the same. The first step is to visit your branch. The next steps are mentioned below.

  • With an existing account: Fill up the FD application form and submit it to the branch.
  • Without an existing account: Along with the FD application form, you have to provide identity proof, address proof and some other documents to complete your KYC.

Benefits of opening Fixed Deposit Account

Fixed Deposits come with the following benefits.

  • Guaranteed returns: The interest rate on fixed deposits is not influenced by market situations and remain fixed. Thus, FDs generate assured returns on maturity.
  • Flexible tenure: Investors can either opt for long-term or short-term fixed deposits based on their investment portfolio and financial goals. The tenure for fixed deposits can be anywhere from 7 days to 10 years.
  • Higher capital gain: Some fixed deposits calculate the interest in the cumulative method, where the interest is compounded monthly, quarterly or half-yearly. This method ensures a higher interest gain on the principal amount.
  • Steady source of income: Some FDs allow inventors to opt for monthly payout with their FD accounts, which can act as a regular source of income.
  • Tax benefits: Investors can enjoy tax benefits under section 80C of the Income Tax Act of 1961.

Eligibility to open a fixed deposit account

Fixed deposits can be both individual and joint accounts. The following are eligible for fixed deposit accounts.

  • Indian residents
  • Non-Resident Indian (NRI)
  • Senior Citizens
  • Minors
  • Sole proprietorship
  • Partnership firms
  • Companies
  • Societies
  • Clubs

Scenario with Illustration

The gained interest and total corpus depend on the interest rates and tenure of fixed deposits. Below are two instances for a clear concept.

  • Suppose you have invested ₹ 1 Lakh at the interest rate of 6.25% for a tenure of 1 year. The gained interest will be ₹ 6,398 at the maturity. The total corpus including the principal amount and the gained interest will be ₹ 1,06,398.
  • Suppose you have invested ₹ 1 Lakh at the interest rate of 5.75% for a tenure of 3 years, you will gain the interest of ₹ 22,118 at the maturity. The total amount including the principal amount and the gained interest will be ₹ 1,22,118.

FAQs

How can I open a fixed deposit account?

You can open a fixed deposit account both offline and online. For the offline process, visit the bank of your preference. Fill up the FD application form and submit it with necessary documents. For the online process, visit the website of the bank and select the options for opening a fixed deposit.

Can we open fixed deposits online?

Yes, you can open fixed deposit accounts online. Follow these steps to open your FD account.

  • Visit the website of the bank of your convenience.
  • Select the options for opening an FD account.
  • Provide the necessary details and then confirm.
  • Download the receipt for further reference.

How many FD can be opened?

You can open as many FD account as you want at any bank, provided you keep the deposit for a minimum tenure of 7 days. However, keep in mind that if the interest exceeds ₹ 40,000 in a financial year, TDS (Tax Deducted at Source) is charged. To avoid TDS you can divide the fixed deposit amount in several branches of the same bank or in several banks.

Can I open a FD without a bank account?

Yes, you can open an FD account without an existing bank account. You can either visit the bank or the website of the bank. To open an FD without an existing bank account, you have to submit identity proof, address proof and other documents to complete your KYC. After completing KYC, fill up the application form for FD and submit it.

How can I invest in FD?

To invest in a FD, you have to open an FD account. Select the amount, tenure, nominee and other details. After opening the account, you will have to invest the principal amount in a lump sum. You can opt to avail the total corpus including the principal amount and interest at maturity or opt for regular payout.


FD News - Dec 2020
  • 2020-12-01 : Lakshmi Vilas Bank customers can access all services
    DBS Bank India announced that customers of the merged bank Lakshmi Vilas Bank can continue to access all banking services. DBS Bank further clarified that the interest rates on savings and fixed deposits are unchanged.
  • 2020-11-26 : Credit growth slows to 5.8% in the September quarter
    RBI reported that the credit growth which includes retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loan decelerated to 5.8% in the September quarter from 8.9% in the year-ago period. Further, deposits which include FD and RD increased by11% year-on-year in the July-September period as compared to 10.1% growth a year ago. The share of current account and saving account (CASA) in total deposits stood at 42.3% in September 2020 compared to 41.2% a year ago.
  • 2020-11-11 : SBI to focus on financial inclusion
    SBI is planning to increase the share of its newly created business vertical, financial inclusion and micro-markets from the current 12% to 20% by March 2022. The bank recently created a separate FI&MM vertical within the bank with an aim of financial inclusion of rural and semi-urban areas to improve customer experience in the hinterland.
  • 2020-11-10 : Ujjivan Small Finance Bank reported a marginal rise in Q2 net profit
    Ujjivan Small Finance Bank posted a marginal rise in net profit at Rs 96 crore for September. Total income during July-September 2020-21 increased to Rs 818.01 crore on the back of retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loans. Further, The bank opened 5.1 lakh deposit accounts between April and September while retail deposits have now grown to 49% of total deposits as against 42% a year back. Deposits which includes fixed and recurring deposits stood at Rs 10,743 crore.
  • 2020-11-06 : New FD rates for Kotak Bank
    Kotak Bank changed its FD rates. The FD rates for 7 to 30 days is 2.50% and 31 to 90 days it is 2.75%. The fixed deposit rate for short tenor for 91 to 179 days it is 3.50% and it is 4.50% for 180 to 364 days. Fixed deposit rate for long tenors of 12 months to 389 days is 4.60%, for 369 days to less than four years is 4.90% and for four years one day to less than 5 years is 4.75%. The revised rates are in effect from 4 November 2020.
*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More
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