Flexi Fixed Deposit

Understand flexi fixed deposits, secure returns with the added flexibility of withdrawals.
Flexi Fixed Deposit
3 min

When investors think of low-risk investment avenues, fixed deposits are the first to come to mind. However, this traditional savings instrument usually comes with a lock-in period that is inconvenient for investors who may need to access their funds before the maturity date. A flexi FD solves this issue.

A flexi fixed deposit is a term deposit scheme that combines the interest-earning potential of a regular FD with the liquidity benefits of a savings or current account. With a flexi fixed deposit, you can make easy withdrawals from the FD account without closing it. The remaining sum in the account continues to grow with the high flexi fixed deposit interest rates. Thus, instead of wondering how to break your FD before maturity, you can make penalty-free partial withdrawals from the account to meet your emergencies or liquidity requirements.

Features of flexible fixed deposits

  • Flexible tenures: Flexi FDs offer you the freedom to choose an investment duration that meets your financial needs and objectives. You can invest in flexi fixed deposits to meet short-term goals like saving up for a vacation or long-term goals like retirement planning.
  • Attractive interest rates: Flexi fixed deposit interest rates are higher than regular savings bank accounts. Better returns on the investment helps you grow your corpus and meet your financial goals faster.
  • Premature withdrawal: Flexi fixed deposit schemes are preferred for their high liquidity quotient. In the event of a financial emergency, you can withdraw a part of your saved funds without dissolving the FD. After a partial withdrawal, the remaining funds in your FD account keep earning interest.
  • Minimum investment amount: With a flexi FD scheme, you have the liberty to choose how much you wish to invest. You can assess your liquidity needs and financial goals to decide on the right deposit amount. However, different banks have varying deposit criteria, so it is best to examine the bank’s policies before investing.
  • Auto-renewal: Most banks offer an auto-renewal option with flexi FD schemes to help make the renewal process easy and hassle-free. In other words, you do not have to remember the maturity date of the FD account to renew it since the bank automatically renews it.
  • Loan facility: You can use your flexi fixed deposit account as collateral to avail of a short-term loan from the bank. Usually, banks allow depositors to borrow up to 95% of the funds in their FD account. The interest rates on these loans are slightly higher than the flexi FD interest rate but much lower than personal loans. However, you should review the bank’s policies and charges carefully before availing of this credit facility.
  • Simplified account opening: Opening a flexi fixed deposit account is hassle-free and easy. Most banks offer a simple and transparent process that is completely digitised. So, you can open a flexi fixed deposit without visiting a physical bank branch.

Difference between flexi fixed deposits and regular fixed deposits

Differences between a flexi fixed deposit and a regular FD account arise from the liquidity benefits and investment flexibility offered by the former. Flexi fixed deposits allow you to deposit and withdraw funds from the linked savings account as and when needed. Regular fixed deposits are locked in for a predetermined tenure, and you cannot add to or withdraw from the sum during this tenure.

Certain types of non-callable FDs and 5-year tax-saver FDs do not allow premature withdrawals. While premature withdrawals are allowed for regular callable FDs, they incur interest penalties of 0.50-1%. As opposed to this, flexi FDs do not impose a penalty charge for premature withdrawals. This gives investors liquidity benefits, making flexi fixed deposits the more practical investment option where they can enjoy easy liquidity and earn high interest on the saved funds.

Flexi FDs can also double up as your contingency fund to meet urgent cash flow needs during emergencies.

Also Read: Download your Fixed Deposit receipt

Flexi fixed deposit interest rates

Some of the top public and private sector banks in India offer flexi FD schemes to customers. For instance, a bank offers an auto fixed deposit scheme that links your savings account to the FD account. Any balance over Rs. 25,000 in your savings account is automatically transferred in multiples of Rs. 5,000 to the linked FD account. The saved funds attract higher flexi fixed deposit interest rates instead of lying idle in your savings account. You can choose from a long-term 5-year auto FD or a short-term one with a minimum duration of 6 months.

Similarly, another bank offers a savings flexi deposit scheme that combines the liquidity of a savings account and the higher flexi fixed deposit interest rates for better yields. Any surplus funds over the minimum balance of Rs. 50,000 in the savings account are transferred to the linked FD account in multiples of Rs. 10,000.

As an investor, you should know that flexi FD interest rates tend to be lower than those of traditional FDs. Depending on the bank’s policies, interest on flexi deposits may be calculated on a daily or monthly basis on the amount present in the FD account. In other words, the more you save and the longer you hold the funds in the flexi FD account, the greater your yields will be.


Flexi FD schemes are convenient options for those who wish to balance liquidity with high interest earnings. These safe investment options offer investors the perks of easy withdrawals and flexible investment tenures. This convenience and easy accessibility make flexi fixed deposits a preferred choice, even if they offer marginally lower interest rates than regular FDs.

That said, flexi FDs are better suited for investors with short-term goals. Investing in a corporate FD may be better if you want to create a larger corpus for the long term. With a Bajaj Finance FD, you can grow your funds at up to 8.85% p.a. You can also enjoy easy liquidity benefits with flexible tenures, customisable payout options, and easy premature withdrawals.

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Frequently asked questions

Who is eligible for flexi fixed deposit?
Each bank has its own eligibility criteria for flexi fixed deposit plans. Most banks have simplified eligibility criteria when it comes to age and applicant types.
How does a flexi deposit work?
A flexi deposit works like a normal fixed deposit but brings investors penalty-free withdrawals and more flexible investment terms. A flexi deposit is linked to your savings account and offers the dual benefit of liquidity and high FD interest rates.
How to withdraw money from the flexi fixed deposit account?
Most banks allow you to withdraw money from the flexi deposit via cheque or ATM withdrawals. You can also contact the bank to make withdrawals.
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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.