Maximise Your Savings: Understanding the Features of Best Fixed Deposit Schemes

October 16, 2024

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When it comes to investing your hard-earned money for better returns, fixed deposits (FDs) are often considered one of the best investment options in India. So, if you're starting your FD investment journey, this blog may pique your interest.

In this article, we have provided all the features of the best fixed deposit schemes in India so you can make an informed decision.

Which Fixed Deposits can be Considered 'Best' in the Category?

Most financial institutions offer FDs. However, the differentiator lies in the product features. Here's what you should look into while booking an FD.

1. Higher Interest Rates

Investors prefer FDs that offer higher interest rates. Generally, small finance banks offer higher FD rates compared to traditional banks. However, before booking such, go through the terms and conditions along with service charges to avoid unpleasant surprises.

2. Digital FDs

Digital Fixed Deposits offer convenience. You can book FD online from the comfort of your couch; no paperwork required.

3. Standalone FD

Book an FD should be simple and easy. However, that's not the case every time. Some FDs require you to open a savings account with the bank. The best FD schemes don't come with such requirements - you can just open a standalone FD.

4. Loans Against Fixed Deposit

One of the unique features of fixed deposits is the ability to avail loans against them. In times of financial emergencies, having a fixed deposit account can come in handy.

Some FDs offer loans up to 75% of the deposited amount. However, the specific loan-to-deposit ratio can vary depending on the scheme and may differ from one bank to another.

5. Maximum Security

Best FD schemes ensure maximum security - both in terms of transactions and returns. Though deposits up to ₹5 lakh are protected under Deposit Insurance and Credit Guarantee Corporation (DICGC), it's best for you to go for a financial institution known for safe and secure transactions.

6. Additional Benefits

Most FD schemes allow premature withdrawals. However, a certain penalty can be imposed if you close your account or withdraw your money before the maturity date. But there are schemes that don't levy charges on premature withdrawals, subject to terms and conditions. Other benefits like minimal documentation, easy-to-book process, priority banking services, easy account access via Mobile or WhatsApp Banking, exceptional customer support, etc., are some of the traits of best fixed deposit schemes.

Point to Note: Ujjivan SFB FDs do not charge premature withdrawal penalty beyond 6-month tenure.

7. Multiple Payout Options

Best fixed deposit schemes provide flexibility with multiple interest payout options - monthly, quarterly, or at maturity. This simplifies income management and suits different cash flow requirements efficiently. You can choose a payout schedule that suits your needs and preferences.

Final Thoughts

Consider these features while booking an FD. Point to note - best FD schemes offer convenience. So, apply for FD schemes that comes with additional benefits to simplify your financial life.

Looking to grow your savings? Ujjivan SFB offers a wide range of fixed deposit products. Select the FD of your choice and take a step forward to your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.

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FAQs

1. What is the minimum tenure for FDs?

The minimum tenure for the FDs varies across banks but can be as short as 7 days.

2. Is a fixed deposit the best investment option?

Fixed deposits are among the safest investments, offering guaranteed returns suitable for risk-averse investors.

3. How is the interest on FDs taxed?

Interest is taxable under income tax laws and depends on the tax bracket you fall under.

4. Can I take a loan against my fixed deposit?

Yes, many banks and financial institutions offer loans against fixed deposits, allowing you to access funds without breaking your FD.

5. Are senior citizens eligible for higher interest rates?

Yes, as mandated by RBI, senior citizens are often offered higher interest rates. However, not all FD schemes may come with this facility.

6. How to choose the best FD plan?

Before selecting a fixed deposit scheme, evaluate factors like security, reputation of the institution, benefits like simplified FD booking, customer support, etc.