How to invest in a fixed deposit in India: A step-by-step guide

You can generally open an FD online through an institution's official website or app, or through its branch or authorised representative. The exact steps, payment methods and documents vary by provider.

How to invest in a Bajaj Finance Fixed Deposit online

Follow these steps to apply for a Bajaj Finance Fixed Deposit:

1. Visit the official website or app. Open the Bajaj Finance website or use its official app.
2. Navigate to Fixed Deposit. Go to the investments section, select Fixed Deposit and choose the option to open an FD.
3. Verify your mobile number. Enter your registered or active 10-digit mobile number and complete OTP verification.
4. Enter your investment details. Provide the deposit amount, select a tenure and choose an available interest payout option. Enter your PAN details and date of birth as requested.
5. Complete KYC verification. Follow the instructions to verify your identity and other required details. Existing customers may be asked to confirm or update their information. New customers should follow the KYC process presented during the application.
6. Review the declaration and terms. Read the applicable conditions, including the interest rate, maturity amount, payout frequency, premature withdrawal rules and other charges or restrictions, where applicable.
7. Provide bank details. Enter and verify the bank account details requested for the transaction and relevant payouts.
8. Make the payment. Complete the investment using one of the payment methods displayed during the application, such as NetBanking, UPI, NEFT or RTGS, where available.
9. Save the acknowledgement and receipt. After booking, check the confirmation sent to your registered contact details. Bajaj Finance states that the Electronic Fixed Deposit Receipt (e-FDR) is sent by email within three working days, subject to the documents being in order.

Use the official Bajaj Finance Fixed Deposit page to review the latest product terms before starting your application.

How can you invest in an FD offline?

If you prefer not to apply online, check whether the bank or financial institution accepts offline FD applications. The process generally involves:

1. Visiting the relevant branch or contacting an authorised representative.
2. Completing the application form with your personal, deposit and nominee details, where applicable.
3. Providing the required identity, address, PAN and other KYC documents.
4. Selecting the deposit amount, tenure and interest payout option.
5. Transferring the funds through an accepted payment method.
6. Collecting and checking the deposit receipt or confirmation.

Keep a copy of the application and the deposit receipt. For a company deposit, the receipt should clearly state the depositor's details, deposit amount, applicable interest rate and maturity information.

Selecting an FD involves more than comparing the advertised interest rate. Consider the following factors before committing your money.

1. Interest rate

Compare the rate offered for your intended tenure and deposit amount. Rates can differ by institution, tenure, customer category and payout option. Check the rate applicable on the date of booking rather than relying on an older advertisement.

A higher advertised rate does not automatically make a deposit more suitable. Consider the issuer's financial strength, deposit terms and risks as well.

2. Deposit tenure

Choose a period that fits when you expect to need the money. A longer tenure may offer a different interest rate, but it also means keeping the funds invested for longer.

For example, money intended for a planned expense next year may not be suitable for a deposit that matures several years later unless the early withdrawal conditions are acceptable.

For Bajaj Finance Fixed Deposits, the published tenure range is 12 to 60 months. Confirm the currently available options before booking.

3. Interest payout frequency

FDs may offer cumulative or non-cumulative options, depending on the provider.

• Cumulative FD: Interest accumulates and is generally paid with the principal at maturity, according to the product's compounding terms.
• Non-cumulative FD: Interest is paid at selected intervals, such as monthly, quarterly, half-yearly or yearly, where offered.

A cumulative option may suit someone saving towards a future expense. A non-cumulative option may suit someone who needs periodic interest income. Compare the applicable rates and estimated payouts before choosing.

4. Premature withdrawal conditions

An FD may not be as readily accessible as money in a savings account. Closing it before maturity may be restricted or may reduce the interest payable. Some deposits also have a lock-in period or other conditions.

Read the issuer's premature withdrawal policy before investing, especially if you may need the money unexpectedly. Do not assume that every FD can be withdrawn immediately or without a financial impact.

5. Tax treatment

Interest earned on an FD may be taxable, depending on the applicable income-tax rules and your circumstances. Tax may also be deducted at source (TDS) when the relevant conditions and thresholds are met.

TDS is not necessarily the final tax payable on the interest. The treatment depends on the applicable tax year, your total income and the rules in force. Check current guidance from the Income Tax Department or consult a qualified tax professional if you are unsure.

A tax-saving FD, where available, is a specific product with its own eligibility, lock-in and tax conditions. Do not assume that every ordinary FD qualifies for a tax deduction.

6. Issuer and credit rating

Check who is accepting your deposit and review the issuer's financial disclosures, applicable regulatory status and credit rating. A credit rating is an assessment of credit risk at a point in time; it is not a guarantee that the issuer will repay every deposit on time.

Bank deposits and deposits accepted by non-banking financial companies (NBFCs) are not covered by identical protections. In particular, deposits mobilised by NBFCs are excluded from DICGC deposit insurance. Review the nature of the deposit and its protections before investing.

7. Maturity and renewal instructions

Check what will happen when the FD matures. Depending on the product and the instructions you provide, the principal and interest may be paid to a linked bank account or the deposit may be renewed under the applicable terms.

Do not assume that every deposit renews automatically. Record the maturity date and review your instructions in advance.

8. Nomination

Where nomination is available, consider adding a nominee and ensuring that the details are accurate. A nomination can help the institution process a claim after the depositor's death, subject to applicable rules and documentation. Review or update nominee details if your circumstances change.

The minimum and maximum deposit amounts vary by provider and application channel. Before deciding how much to invest, consider your essential expenses, emergency savings, upcoming financial commitments and other financial goals.

For Bajaj Finance Fixed Deposits, the published product page states a minimum investment of Rs. 15,000 for online booking and an online investment range of Rs. 15,000 to Rs. 3 crore. Check the official page for current limits and any different conditions that apply to offline bookings or specific customer categories.

You do not need to place all your available savings in one FD. Depending on your needs, splitting a sum across deposits with different maturity dates may help stagger access to your money. This approach does not remove issuer risk, and each deposit's terms should be reviewed separately.

An FD calculator can help estimate the interest and maturity amount for a chosen deposit amount, interest rate, tenure and payout option. The actual calculation depends on the product's terms, including the compounding method and payout frequency.

For example, suppose you deposit Rs. 1,00,000 at an illustrative annual interest rate of 7% for one year. If the product pays simple interest for that period, the illustrative interest would be Rs. 7,000 before tax. The total would be Rs. 1,07,000.

This is a simplified example, not a quotation for a particular FD. Actual returns may differ because institutions use different calculation and compounding methods, and the rate available when you book may not be 7%.

Use the relevant institution's FD interest calculator or calculator page to estimate returns using the current rate and product terms.

After the institution receives your payment and completes the required checks, it should provide a confirmation or deposit receipt according to its process.

After booking:

• Check that the deposit amount, interest rate, tenure, payout frequency and maturity date are correct.
• Save the acknowledgement, electronic receipt and related correspondence.
• Note the maturity date and any renewal or payout instructions.
• Keep your contact and bank details updated with the institution.
• Review interest statements and applicable tax deductions.
• Contact the institution through its official support channels if the receipt or expected confirmation does not arrive within the stated period.

For a Bajaj Finance Fixed Deposit, the published process provides a Fixed Deposit Acknowledgement (FDA) through registered contact details and states that the e-FDR is sent by email within three working days, subject to the documents being in order.