How HNIs Can Grow Their Wealth with Fixed Deposits
July 05, 2025

High Net Worth Individuals (HNIs) have unique financial needs and seek optimal wealth management solutions. Since debt funds are not tax efficient anymore, HNIs are shifting to Fixed Deposits (FDs) as their preferred choice of fixed income instrument.
In this blog, we have explained how HNIs can ensure wealth growth in a safe and secure way via FD investments. Let's dive in!
Benefits for HNIs When Investing in FDs
Investing in Fixed Deposits offers several advantages, making them a popular choice for HNIs, especially those seeking low-risk options. Here are the advantages of investing in FDs for HNIs:
Guaranteed Returns
FDs provide a fixed interest rate over the investment period, ensuring predictable and stable returns. This characteristic makes them an attractive option for conservative investors who prioritise capital preservation over high-risk investments.
Higher Interest Rates
Compared to traditional savings accounts, FDs typically offer higher interest rates. This allows investors to maximise their savings with minimal risk, as the interest is calculated using the compound interest method, leading to potentially greater returns at maturity. There are FDs specifically meant for HNIs offering higher interest rates compared to regular FDs.
Safety and Security
FDs are considered low-risk investments, as defaults are unheard off. In India, deposits up to ₹5 lakh are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), providing an additional layer of security for depositors.
Flexible Tenure Options
Investors can choose from a wide range of tenures, from as short as 7 days to as long as 10 years. This flexibility allows individuals to align their investments with their financial goals, whether short-term or long-term.
Convenient Access to Funds
While FDs typically lock in funds for a specified period, they also offer liquidity options. Investors can withdraw funds in emergencies, although this may incur penalties for premature withdrawal. Some banks provide callable FDs, allowing for easier access to funds if needed.
Fixed Deposit Strategies for Better Wealth Management
In order to make the most of your fixed deposit investments, here are some fixed deposit strategies for HNIs:
Diversify Your Investments
Example: Let's say Dhaval, an NRI has ₹10 lakhs to invest. Instead of putting the entire amount in a single FD, he can consider diversifying his investments across multiple FDs, with each deposits being lesser than ₹5 lakh. This strategy helps mitigate risks and ensures that even if the bank faces financial difficulties, his entire investment portfolio remains secure.
Opt for Cumulative FDs
If you don't require regular interest income and are looking for higher overall returns, consider opting for cumulative FDs. In cumulative FDs, the interest is compounded and reinvested until maturity, providing a lump sum payout at the end.
Evaluate the Interest Rates
Before investing in an FD, compare the interest rates offered by different banks or financial institutions. This will help you choose the option that offers the highest returns on your investment. Ujjivan Small Finance Bank offers Platina Fixed Deposit - an FD specifically designed for HNIs. The interest rate offered is comparatively higher than regular Fixed Deposits.
Use a Fixed Deposit Calculator
To accurately estimate your returns from an FD, use a fixed deposit calculator. These online tools take into account factors such as the principal amount, tenure, and interest rate to calculate the maturity amount and interest earned.
Evaluate Premature Withdrawal Penalties
Before investing in an FD, carefully review the premature withdrawal penalties imposed by the bank or financial institution. If you anticipate needing access to your funds before the maturity period, choose an investment option that offers flexibility without hefty penalties.
Final Thoughts
In conclusion, fixed deposits are an attractive wealth management option for HNIs due to their stability, assured returns, and liquidity. By diversifying your investments, considering different tenures, evaluating interest rates, using a fixed deposit calculator, understanding tax implications, and reviewing premature withdrawal penalties, you can make informed decisions to maximise your returns.
Looking to grow your savings faster? 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.
Disclaimer:
The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.
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FAQs
1. Are FDs a safe investment option for HNIs?
FDs are not market-linked. Hence, the interest rate stays unaffected during market downturn. considered a safe investment option as they provide guaranteed returns and are not subject to market fluctuations. However, it's important to choose reputable banks or financial institutions for your investments.
2. Can I invest ₹1 crore in Fixed Deposits?
Yes, with Ujjivan SFB's Platina Fixed Deposit, you can invest up to ₹3 crore in fixed deposits for a tenure of up to 60 months or 5 years.
3. Should I consider short term or long-term FDs?
nvest as per your financial goals. If you have short-term goals to meet like accumulating funds to buy a new car, investing in short-term FD would be better.
4. Can NRIs invest in fixed deposits in India?
Yes, NRIs can invest in fixed deposits in India subject to certain conditions. Banks offer NRE (Non-Residential External) and NRO (Non-Residential Ordinary) fixed deposit options specifically designed for NRIs.
5. Are FD interest rates fixed or variable?
FD interest rates are generally fixed at the time of investment and remain constant throughout the tenure.
6. What is the minimum deposit amount for an HNI fixed deposit?
The minimum deposit amount for an HNI fixed deposit varies across banks and financial institutions. It is generally higher than regular fixed deposits. For example, minimum investment required for Platina FD is ₹1 crore.
7. Are senior citizen benefits applicable to HNI fixed deposits?
Yes, many banks and financial institutions offer additional interest rates for senior citizens, including HNIs who qualify based on their age.
8. Can I add a nominee to my fixed deposit?
Yes, you can add a nominee to your fixed deposit. The nominee will be entitled to receive the proceeds in case of your unfortunate demise.
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