Types of Fixed Deposit: Explore Different Types of FD

Discover various types of fixed deposits: Regular, Cumulative, Tax-saving, and FD for Senior Citizen. Secure your savings today.
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4 mins
3 April 2024

A fixed deposit (FD) is an investment option offered by banks and other financial institutions. In this a customer can deposit a lump sum of money for a fixed period, usually ranging from a few months to several years. The customer earns interest on the deposited amount, and the interest rate is usually higher than that of a regular savings account.

Fixed deposits have a fixed interest rate for the entire tenure, and thus the name. However, the FD rates may vary from one company or bank to the other. The money in a fixed deposit can be withdrawn before the completion of tenure by incurring some financial repercussions. In case of emergency, you can withdraw your money with some loss of interest.

Who offers FD

Fixed deposits are offered by banks, non-banking financial institutions and post offices. If you fulfil the eligibility criteria, you can invest your money in a fixed deposit with any company or bank. Investors can choose where they want to invest their money, by comparing the interest rates, credit ratings of companies and other factors.

Pro tip

Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.85% p.a. by investing for 42 months via our website and app.

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Types of Fixed Deposits

Addressing the popular fixed deposit account types offered in India, financial institutions offer several kinds of fixed deposit plans. Let's take a quick look at the FD types:

Cumulative Fixed Deposit:

This FD is a subset of a traditional fixed deposit in which interest is paid out upon maturity. The investment amount is increased by the interest that was accrued over the preceding month or interest period. You may increase your earnings thanks to the power of compound interest.

Non-Cumulative Fixed Deposit:

This is a subset of a conventional fixed deposit, much like a cumulative FD is. However, this FD is excellent if you want to receive regular income because interest is paid out on a monthly, quarterly, half-yearly, or annual basis. The maturity amount is consequently less than that of a cumulative FD.

Tax Saver Fixed Deposit:

As the name implies, you can take a tax deduction of up to Rs. 1.5 lakh in a financial year with this fixed deposit, which helps you save money on taxes. In this case, you must invest a one-time lump sum for a five-year lock-in period.

Bank FDs:

A bank FD is a specific kind of fixed deposit in which you make a one-time lump sum deposit into a bank for a predetermined time. Depending on the interest rate in effect when you book your FD, your deposit will accrue interest.

Company FDs:

Another well-liked FD alternative is company FDs, commonly referred to as corporate FDs. Any fixed deposit that is provided by financial institutions and NBFCs is referred to as a company FD.

It is essential that you evaluate CRISIL, ICRA, and other credit ratings when saving with firm FDs. They show you the degree of safety you can have. Company FDs frequently provide variable tenors and more affordable rates of return.

Post Office FD:

One of the safest savings options on the Indian market is the post office fixed deposit, sometimes referred to as the post office term deposit. Indian Postal Service is the one who issues it. It is also supported by the sovereign guarantee of the Indian government.

Flexi Fixed Deposit:

This fixed deposit gives you the advantages of both a traditional FD and a demand deposit. Your investment in this is connected to the issuer's savings accounts. It provides better interest rates along with a savings account's liquidity.

Types of Bajaj Finance fixed deposit (FDs) available

Bajaj Finance Fixed Deposit enjoys a [ICRA]AAA(Stable), indicating the highest level of safety and lowest investment risk. BFL FDs have also a rating of CRISIL AAA/ STABLE, which is another reason to invest. You can invest Rs. 15,000 to Rs. 5 crore- in our FD and earn competitive returns of up to 8.85% p.a. Mentioned below are some of the different fixed deposits that Bajaj Finance offers to suit your convenience and investment needs.

Fixed deposit for customers below the age of 60

All investors below the age of 60 can apply for a fixed deposit and earn returns up to 8.60% p.a. Some of the key features of this are:

  • Interest ranges from 7.11% p.a. to 8.60% p.a.
  • Choose investment amount from Rs. 15,000 to Rs. 5 crore
  • You can choose a tenure of 12 to 60 months
  • Minors can apply for fixed deposit with the help of a guardian
  • You can choose flexible payout option for interest payment on monthly, quarterly, half-yearly, or yearly basis
  • End-to-end online application process

Fixed deposit for senior citizens

Customers above 60 years of age, can also apply for a fixed deposit and earn returns up to 8.85% p.a. Some of the key features include:

  • Interest rate from 7.96% p.a. to 8.85% p.a.
  • Additional rate benefits of up to 0.40% p.a. for senior citizens
  • Get regular income after retirement on monthly, quarterly, half-yearly, or yearly basis, with flexible payout option.
  • Invest from the comfort of your home, with an end-to-end online application process.

Fixed deposit for NRIs

All Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs) with Non- Resident Ordinary Account (NRO) accounts can also apply for a fixed deposit with Bajaj Finance offline. You can get in touch with our customer care executives to apply.

  • Deposit an amount for a fixed tenure and earn at up to 8.30% p.a.
  • Tenure ranges from 12 months to 36 months
  • Payment is accepted only through cheque or RTGS/ NEFT from an NRO bank account
  • You can choose flexible payout option for interest payment on monthly, quarterly, half-yearly or yearly basis

Systematic Deposit Plan (SDP)

If you are looking for a regular monthly deposit scheme, then choose Systematic Deposit Plan. It allows you the flexibility to make regular deposits for the tenure of your investment.

  • Make regular deposits of Rs. 5,000 to Rs. 5 crore
  • The tenure ranges from 12 to 60 months. The deposits may vary based on the scheme chosen
  • Choose Single Maturity Scheme to receive both investment amount and interest for all deposits at the end of tenure
  • Choose Monthly Maturity Scheme to receive the investment amount and tenure for each deposit on completion of each deposit tenure
  • The interest rate on each deposit may vary based on prevailing FD rates
  • Additional rate benefits of up to 0.40% p.a. for senior citizens

Advantages of fixed deposit

Investors looking to invest in fixed deposit can get following benefits:

  • Profitable returns: The interest rate on a fixed deposit is fixed at the time of investment. So, the returns are predictable and can be determined using the FD calculator
  • Safety: Fixed deposits are considered a low-risk investment option, as they are typically offered by banks and other financial institutions that are insured by the government. You can check the ratings of different fixed deposits to ensure security and safety of your deposit
  • Flexibility: Fixed deposits typically offer a range of tenures, allowing investors to choose the term that best suits their needs
  • Liquidity: Most fixed deposits can be easily liquidated before maturity, although there may be a penalty for early withdrawal
  • Higher interest rate: Fixed deposit generally offers higher interest rate compared to savings account

Who can invest in a fixed deposit?

If you are a new investor, fixed deposit is one of the best options for you, offering low-risk, high returns investment. As FDs offer profitable returns, there is almost no risk of principal loss, however the rate of return is limited as compared to other high-risk options.

All Resident Indians, Sole proprietorships, Partnership firms and companies, Hindu Undivided Families (HUFs), clubs, associations, societies, and family trusts can apply online for Bajaj Finance Fixed Deposit.

Non-Resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Citizens of India (OCI) can connect with our representative or write to us on wecare@bajajfinserv.in.

Frequently Asked Questions

What is the Digital FD offered by Bajaj Finance?

Bajaj Finance has launched a new FD variant called "Bajaj Finance Digital FD" for a period of 42 months. Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a. for senior citizens and for the customers below the age of 60 they are providing up to 8.60% p.a. The Digital FD can be opened and managed only through the Bajaj Finserv website or app.

Is there any special interest rate for Senior Citizen on Fixed Deposits?

Yes, many banks and NBFC’s like Bajaj Finance offers special FD interest rates for senior citizens, providing them with higher returns on their fixed deposits.

How to open an FD account offline?

To open an FD account offline, visit the nearest branch of the bank or financial institution, fill out the application form, submit required documents, and deposit the desired amount.

Is FD tax-free?

No, the interest earned on FDs is taxable. It is added to the investor's income and taxed according to their applicable income tax slab.

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Disclaimer

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.