Everything you need to know about Fixed Deposit

Jitin Gupta April 28, 2022

What is a Fixed Deposit? A fixed deposit signifies an investment pattern that, banks, Co-op Credit societies, post-offices, and other non-banking financial institutions provide. FDs offer superior returns on the principal invested when equated to the returns produced from a regular savings account. How does it work? In the case of Fixed Deposits, you invest for a fixed amount of time and get a fixed interest rate, hence the name. Based on a consumer’s investment portfolio, the FD investment period can either be short-term or long-term. The interest rates on fixed deposits may vary from one financial institution to another. Fixed deposit investors cannot withdraw money before maturity without any financial repercussions. In emergencies, early withdrawal is possible after the payment of penalties. In today’s times of increasing market volatilities, investing in a Fixed Deposit can help you get secure returns and stable growth of capital so you can build your savings with absolutely no effect of market uncertainties. What are the benefits of investing in Fixed Deposits? Fixed Deposit investors expect the following benefits from their investment

Fixed returns – Unlike most other investment plans, FDs offer assured returns on the deposited amount. So, no matter how interest rates move or economy acts, you will get the returns promised at the time of investing.
Assurance: At the end of the investment tenure, you get back the amount you put in along with the accumulated interest.
Flexibility – The best FD plans offer flexibility when it comes to the tenure of the plan. Based on the investment goals, you can either open short-term FD accounts or long-term FD accounts. Most financial institutions offer maturity tenures extending from 31 days to 5 years.
Low-Risk Level- There are various ways to invest your money. The investment options such as mutual funds, bonds and stocks give you high returns, however, they are volatile in nature as they are linked to market risks. People who do not want to or are not ready to take such risks can invest in FD. They are a great option for people with long-term financial goals.
Higher interest for Senior Citizens: For Senior citizens pursuing safe investment avenues to invest their life savings, there are several benefits of Mudra fixed deposit. As a senior citizen, you can easily gain additional rate benefit of 0.5% over and above the regular interest rate.
A surplus source of income – The investor can select the frequency of interest payout for non-cumulative fixed deposit plans. Therefore, they can act as an added source of income.

Who offers a Fixed Deposit? As stated earlier, fixed deposit investments are offered by banks, Co-op Credit societies, post-offices, and other non-banking financial companies. In India, investors have numerous options to open fixed deposit accounts. However, they must compare the interest rates, the credibility of the financial institution, and other features before depositing their funds. What are the Prevailing FD Rates? There is no one fixed rate on FD investments across the financial domain. The rate of return for an investor greatly depends on the Co-op Credit society, bank or financial institution offering the investment option. Each one provides different interest rates on deposits. Moreover, the return rate also depends on the age of the investor. Senior citizen investors can expect greater returns when compared to individuals below 60 years. At Mudra, you get attractive FD interest rates of up to 9% (9.5% for senior citizens) so you can save for your goals easily. Investing in a Mudra Fixed Deposit is easy, as you can invest from the comfort of your home through an end-to-end paperless online investment process in 3 easy steps. Link - https://www.mudraonline.in/fd Who should invest in Fixed Deposit? Fixed deposits are perfect investment tools for investors across varied profiles, objectives,s and age groups. Further, gain-seeking, risk-averse individuals can benefit significantly from such schemes. Since FDs offer assured returns, there is no risk involved. Who is eligible to open an FD account? The following people are eligible to invest in a fixed deposit:

Residents
Hindu Undivided Family (HUF)
Group Companies, Limited Companies, Partnership Firms
Sole Traders
Associations, Clubs, and Societies
Family Trusts
Minors (through their natural or legally appointed guardian)

Why consider FD for a diversified portfolio? Investors may be prone to risks when they invest in market-linked instruments to earn higher returns. Hence, to ensure equalized financial growth, investors need to seek safer investment options as well. Fixed deposits are safe and lead to guaranteed returns, as opposed to risk-prone instruments. Therefore, even when an investor loses money on other investment instruments, they can recover a portion of their losses from the FD investments. Are there special rates for senior citizens? Most financial institutions do offer special interest rates for senior citizens. Can I break a Fixed Deposit before maturity? Yes. If you need funds urgently you can avail of premature withdrawal of your Fixed Deposit. You can either break your FD or partially withdraw it, although there are penalties for the early closure. This will attract a penal interest which will be charged/deducted from the interest rate of the tenure completed by the fixed deposit. In the case of partial withdrawal, similar rules of premature withdrawal are applicable. What happens if the depositor passes away? In case of unforeseen circumstances, the Fixed Deposit amount can be claimed by the nominee on maturity. This can differ depending on the mode of holding.

Jitin Gupta

Director

Mudra Co-Op Credit Society Ltd.

BFSI Committee

Pune Chapter

More than 13 years of banking experience with HDFC Bank and Axis Bank spanning across Wealth, Ethics, Sustainability, Rural Banking and Digital Banking verticals. His expertise lies in strategy and execution, which is what he is pursuing in his current role with Mudra. He also has a two year fellowship with Teach For India.

View Microsite

Want to connect ?

Everything you need to know about Fixed Deposit

Jitin Gupta

Director

BFSI Committee

Pune Chapter

You May Also Like

Story Coach & Chief Community Builder | Bloggers Alliance | Delhi

Owner | Koncept Marketing Consultants | Mumbai

Consultant to FinTech Companies | HELM Group LLC | New York

Consultant Pulmonologist | Wockhardt Hospitals Ltd. | Mumbai

Founder & CEO | Crossing The Travel Company | London

Committee Member | American Society of Clinical Oncology | Indore

Founder & Chief Career Designer | lifeFest Enterprise Pvt.Ltd | Delhi

Ex-Chief Marketing Officer | OpenTap | Chennai

Director | Mudra Co-Op Credit Society Ltd. | Pune

Partner | Swapnanjali Jewellery Studio | Pune

Director | Ex. Governor Of Rotary, Kinetic Group | Pune

Head Biodiversity, Corporate Sustainability | Tata Steel | Kolkata

Founder & Director | Aakarshan Gems And Jewellery | Indore

Founder & CEO | Virtual Information and Communications | Kolkata

Founder & CEO | DviO Digital | Pune

Director | Mudra Co-Op Credit Society Ltd. | Pune

Social Entrepreneur | Swayam | Indore

Founder & CEO | Emorphis Technologies | Indore

CEO | Softhread | New York

Head Of SCM | Sheenlac Paints Limited | Bengaluru

Founder | Wine Sapiens | Global

Motivational Speaker, Entrepreneur | Chroma International | Ahmedabad

Member of the Board [NED] | Decomplex MG | London

Owner | Paragon Consulting | Dubai

Founder & CEO | Great Discount Place | Pune

Contemporary Visual Artist | Shan Re | Bengaluru

Ex-Chief Marketing Officer | OpenTap | Chennai

Founder & CEO | Malt & Salt Hospitality | Dubai

CEO | Al Huzaifa Furniture | Dubai

APS Strategic Programs Leader, EMEA & APAC | Avaya | Dubai

Chief People Officer | BoardRoom Group | Singapore

Founder & CEO | Chezuba | Hyderabad

Asia Datacenter Sustainability Policy Lead | Microsoft | Singapore

General Manager - TA | Vodafone | Pune

Founder | Let's Recycle - NEPRA Resource Management Pvt. Ltd. | Ahmedabad

Co-Founder | Arrka | Mumbai

Founder & Director | Drinks & Destinations | Mumbai

Founder & CEO | Chezuba | Hyderabad

Founder & Director | Alice People Solutions | Global

Founder | Minerva Engagement | London

Owner | Paragon Consulting | Dubai

Co-Founder and Creative Director | Wikka | Delhi

Founder | Significant Connection | Dubai

Co-Founder, Director & CEO | Great Place to Work Institute (India), Great Manager Institute (GMI) | Mumbai

Global CEO, Founder | Dr. Devnani & Associates | Hong Kong

Commercial Director- Apac | Ge Renewable Energy | Kolkata

Founder | Happiness Pattern | Dubai

Founder | Happiness Technology | Bengaluru

Founder & Chief Happiness Officer | Hope & Happiness | Bengaluru

Lead Innovation Coach | SAP Innovate to Win | Dubai

Partner | ALMT Legal | Bengaluru

Senior VP Sales (South & Central Asia) | IDS Softwares Pvt. Ltd. | Delhi

Sales & Marketing Director, Connoisseurs Department | Brave New Spirits Ltd | London

Founder & Chief Mindset Coach | The MindsetFit Method (Melbourne, Australia) | Global

Chief People Officer | Bumrungrad International Hospital, Bangkok | Bangkok

President | Healthy Living and Longevity Medical Center | Global

Co-Founder | Creative Movement Therapy Association of India | Delhi

Founder & Director | Creative Arts | Kolkata

Founder | SHARAN | Chennai

Founder | Onyi Anyado Media House | London

Founder & CEO | iConsult India | Ahmedabad

Mindset Transformation Coach | Anjali Ahuja | Delhi