Do you have funds lying idle in your bank account? Open an FD account that would fetch higher returns after a fixed period. Usually, every bank accepts fixed deposits for a fixed tenure and offers a particular interest rate.
It is the safest mode of investment that offers better returns in the market. Customers prefer this no-risk, no-loss investment as it provides slightly higher returns than a savings account. If you opt for FD investment, your capital is guaranteed with predictable and regular returns.
How does an FD work?
When you open an FD account, you should invest a certain sum of money for 1, 5, or 10 years. The tenure can start from one week to 10 years. The bank doesn’t allow you to withdraw before the stipulated time. It doesn’t allow you to add extra money either. Suppose you invest 5 lakhs for 5 years and want to add 1 lakh to your FD account, your bank will not allow you to do that. You can open a new FD account for the extra money.
The longer the tenure of your FD, the higher the returns. On maturity, the FD amount with interest gets credited to your savings bank account. There is an option for auto-renewal after maturity.
Features of fixed deposit:
- Fixed returns: Unlike stock market returns, which are highly unpredictable, FD returns are predictable and assured. You can even check the balance online by creating an ID and PW.
- Tax deductions: You can claim tax deductions under Section 80C of the Income Tax Act if you invest in a 5-year tax-saving FD.
- Safe and secure: As FDs are not subject to market risks, they provide capital assurance. After maturity, you will get the capital amount plus interest agreed upon during the opening of the fixed deposit account.
- Loan against FD: If you have an FD account, you can approach your bank for a loan against the FD account.
How can I check the balance in my FD account?
A customer can always check the balance in the FD account by logging into the service provider’s portal. You need to click “My account” in the portal to check the details in the FD account.
Sign in using your FD user ID and PW to do the following transactions:
- Check the tenure, rate of interest and date of maturity of your FD.
- Renew your fixed deposit by adding a new tenure and increasing the returns on the existing amount.
- Get access to your FD receipt by downloading it. You can also check the statement of account by simply logging into the same account.
- You can change or add a nominee to the FD account by clicking on the details.
To summarize, a fixed deposit is the most popular way to invest money, as it has zero risk and guaranteed returns. Many customers open an FD account with the bank; they hold a savings bank account to utilize the cash when they need it the most. There are short-term FD and long-term investments where you can park your idle funds and use them during the money crunch. Every bank provides FD with an option to check online history at a future date.