Fixed deposits (FD) are investment tools offered by banks and non-banking financial companies that allow you to deposit large sums of money in return for a higher rate of interest than savings accounts and for a specific period that ranges from 7 days to 10 years.
FDs have a lock-in period, meaning you will not be able to break it before maturity without incurring a penalty. Moreover, once deposited, you cannot add more money to your FD. You’ll need to create another FD for that. Company FDs offer better interest rates than banks, and at maturity, you can decide whether you want to renew the FD or withdraw it.
Documents needed for FD account application
The following are the documents you’ll need to apply for an FD account:
- Self-attested ID proof: You’ll need to submit a self-attested photocopy of your ID documents. This could be a photocopy of your Aadhar card, passport, driving license, voter’s ID card, or NREGA job card.
- Self-attested address proof: You are also required to submit documents that confirm your nationality and place of residence. Your passport, voter’s card, driving license, Aadhar card, utility bills, property receipts, or even bank account statements will do for this.
- Signature proof: Institutions also require you to verify your signature to prevent strangers from using and withdrawing money from your account. Photocopies of your passport, PAN card, or even driver’s license will do for this.
General eligibility for FD scheme
Following is the list of those eligible for an FD scheme:
- Indian residents: RBI guidelines state that an investor who is opening an FD should be an Indian citizen living in India. This means that foreign citizens and NRIs cannot apply for an FD in India.
- Hindu Undivided Family (HUF): A legally acknowledged HUF is also eligible for an FD.
- Sole proprietorship and other organisations: All sole proprietorships, partnerships, and other companies (including group companies) officially registered by the government of India are eligible to apply for fixed deposit schemes.
- Clubs and other associations: All clubs, societies and associations are also qualified to apply for an FD.
- Family trusts: A family trust can be defined as a trust created to manage a family’s assets or conduct family business. Family trusts are also eligible to apply for FDs, but not charitable trusts.
Thus, FDs are easy to apply for, and when you meet their eligibility criteria and provide all the required documents, approval of your FD application is guaranteed. Moreover, FDs also come with a lot of benefits. For example, you can get a loan against your FD in times of emergency. What’s more, Bajaj Finserv makes availing of such loans much easier with pre-approved offers on loan products and services. All you have to do is share some basic information to get your pre-approved offer.
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