A fixed deposit is a type of savings account where a lump sum is locked in for a fixed tenure at a predetermined interest rate, offering guaranteed returns on maturity. Fixed deposits (FDs) are one of the most popular investment options in India. There are many types of fixed deposit accounts are available. Whether you’re saving for your child’s education, planning for retirement, or building an emergency fund, to understand the various FD options is crucial. By understanding the features and benefits of each type, you can make an informed choice and maximize your savings.
There are primarily 10 types of fixed deposit accounts, each with unique features and benefits designed to cater to different financial goals and investor needs. Go through this article and know 10 types of fixed deposit accounts you can invest in.
Things to Consider Before Choosing a FD
- When selecting an FD try considering factors like tenure, interest rates, payout options, liquidity and taxation.
- Know the features and benefits of each type.
- Don’t forget to check the required documents.
- Always open your fixed deposit with a trusted institution for a seamless and secure investment experience.
10 Types of Fixed Deposit Accounts you Can Invest In
1. Regular Fixed Deposits
The most common type of FD offered by banks and NBFCs are the regular fixed deposit accounts. In this flexible tenures ranging from 7 days to 10 years. Compared to savings accounts it offers higher interest rates. This type of FD is ideal for short to medium-term goals.
2. Flexi Fixed Deposits
Flexi fixed deposit account is ideal for those who want liquidity along with high returns. It allow partial withdrawals without closing the entire FD. This type of FDs offer both cumulative and non-cumulative interest options.
3. Tax-Saver Fixed Deposits
This type of FD qualify for tax deduction up to ₹1.5 lakh under Section 80C. In tax saver fixed deposit accounts the mandatory lock-in period is 5 years. This FD is suitable for long-term goals and tax planning. In this interest is taxable and no loans allowed against deposit
4. Cumulative Fixed Deposits
This type of FD is ideal for long-term wealth creation. In this interest is compounded quarterly or annually and paid on maturity. Power of compounding helps money grow exponentially.
5. Non-Cumulative Fixed Deposits
Investor’s those who seeks regular income non-cumulative FDs is suitable for them. This type of FD is ideal for retirees or those with steady cash flow needs. In this interest is paid out at regular intervals (monthly, quarterly, half-yearly, annually).
6. Senior Citizen Fixed Deposits
Senior citizen FDs are exclusive for investors those who aged 60 years and above. It offers higher interest rates than regular FDs (0.25% to 0.75% more). In this investors get same flexible tenures and payout options as regular FDs.
7. Minor Fixed Deposits
Minor fixed deposit account is the great way to save for child’s future needs like education. In this FDs opened in the name of a minor child (below 18 years. This type of FD offer same interest rates as regular FDs. Minor FD accounts can be operated by parents or legal guardians.
8. Corporate Fixed Deposits
Corporate FDs offered by companies to raise funds. Compared to bank FDs it carries higher risks. This type of FDs typically offer higher interest rates than bank FDs. This FD is suitable for investors with higher risk appetite.
9. NRI Fixed Deposits
This is an exclusive FDs for Non-Resident Indians (NRIs). NRIs those who are looking to invest surplus funds in India, this type of FD is ideal for them. It can be opened in NRE, NRO or FCNR accounts. NRI FD accounts offer attractive interest rates and tax benefits.
10. Specialized Fixed Deposits
Specialized FDs catering to specific needs or occasions, for example: Wedding FD, Education FD, Property FD and Pension FD. It may offer additional features or benefits. This type of FDs align with particular financial goals or life events. Make sure you compare interest rates, calculate returns, check the credibility of the institution, and read all terms carefully before you canchoose any FD type. Keep your investment horizon, financial goals, risk appetite and liquidity needs in mind.
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