All About Fixed Deposits: Features, Benefits, and Eligibility Criteria

Man using phone for mobile banking


A fixed deposit is a savings account where you put your money for an agreed number of months or years in return for guaranteed interest. Suppose you deposit Rs 5 crore with a bank for five years under an agreement that 8% interest is added to the principal amount annually. 

A fixed deposit is an agreement between a customer and the financial institution where you cannot withdraw the principal amount for a period when accrued interest is tangible later.

Fixed deposit is also known as a term on deposit or time deposit because the deposited fund is for an agreed number of years. Per the depositor's desire, this term can be anything from 2 to 5 or 10 years. Shortened terms are possible if all parties agree to it. This manner of saving money comes with several features, benefits, and eligibility criteria.

Features of Fixed Deposit Accounts

Here are some of the features of a fixed deposit account:

• The deposit is frozen in the account for the agreed number of months or years.

• Most banks do not allow customers to withdraw from the account until the agreed number of years expires. A few banks do but at a fee to the customer.

• A fixed percentage of interest rate is applied to the account every month, quarterly, or annually.

• The interest rate is usually higher than that for a regular savings account, and the interest remains fixed regardless of market fluctuations.

• You can deposit as much money as you want into your FD account. You can withdraw the fund when the term expires or renew the fixed deposit account for more years.

Benefits of Fixed Deposit Accounts

FD accounts come with lots of advantages. Some of them are:

• Guaranteed Investment Returns - You can easily calculate the total amount you will collect after the agreed term expires. Your investment is safe and protected against any market forces.

• Renew for Compound Interest - You can negotiate to renew your fixed deposit for more years after the initial expiration. With this, you can negotiate for compound interest on your investment, generated on your principal amount and another on the accumulated interest.

• Access Your Fund - Although never advisable, you can withdraw from your fixed deposit if your financial institution allows it. The only downside is that withdrawing from your account before the due date will attract high fees.

• Get A Loan On Your Fixed Deposit - If you ever need money, you can withdraw from your fund or take out a loan on the deposit. The FD will run its course without any impacts, and at maturity, you can use part of it to liquidate your loan.

Eligibility Criteria for Fixed Deposit Accounts

The eligibility criteria for operating a fixed deposit account are as follows: 

• Open an FD account online or offline by filling out a form at a banking hall.

• Ensure you provide documents such as a PAN card, government-issued ID, passport photograph, proof of residence, and any other verifications required by the ICICI Bank.

• You must be 18 and above, a resident of India, paid employee or businessman or a retiree.

If you want to open a fixed deposit account to invest your money, you may speak with an ICICI Bank representative for more guidance.


Comments

Post a Comment

Popular posts from this blog

New Trends and Technologies in Mobile Banking

Image
Fintech is making the banking industry undergo rapid innovations. From an interactive mobile banking app to voice-controlled banking operations, newer technologies are setting newer trends in modern banking. Smartphones have made mobile banking easier, and plenty of other transformations will make banking more personalised than ever. Some of these are as follows: · Voice-Controlled Banking Made possible by voice-recognition technology, consumers can soon carry out banking transactions using their voices only. Just as Alexa and Siri can be activated and controlled by voice, banking operations will soon become possible with voice commands for people who do not want to type out instructions. · Wearable Technology Customers can take hard token devices everywhere to authenticate banking transactions. Very soon, wearable technology will facilitate banking operations. With wearable devices such as smartwatches or fitness trackers, consumers can soon carry out financial payments, account manag
Read more

Unlocking Financial Flexibility: The Benefits of an Overdraft Facility for Businesses

Image
Financial flexibility is one of the fundamentals behind the success of a business. It allows a company to manage its funds better and ensure enough cash flow for the operations to run smoothly. In this process, one facility that comes in very handy is the overdraft bank account. An overdraft account is a specific banking facility offered to certain customers. Keeping the personal banking terms aside, it provides organisations with a pre-decided credit line that they can utilise if there aren’t enough funds in the account. Typically, for companies, it is available with the current account. Here is an example to clarify this further. Let’s say you have a company bank account with a Rs 2 lakh overdraft facility. In this case, once you run out of balance in the account, you can access up to Rs 2 lakh without prior approval. With the basics out of the way, let’s understand the benefits of it for businesses.  Top 3 Advantages of an Overdraft Facility for Businesses     1. Easy Access to Cre
Read more

Understanding Mobile Banking: Types of Services Provided

Image
Mobile banking, or mBanking, involves financial transactions on your bank account via mobile devices. With the appropriate mobile app on your smartphone, you can transfer and receive payments, obtain and liquidate loans, apply for debit or credit cards, make UPI payments, and pay utility bills – all from the comfort of your home or office. That is mobile banking in its full essence. You can do mobile banking using a mobile banking app or your financial institution's website. You can access your bank's services via smartphone or laptop without entering the banking hall. You can even conduct financial transactions while in your car commuting to work. Mentioned below are some mobile banking services you can access on the go: · Internet banking Internet or online banking activity requires logging into your account via your bank's website. If you use ICICI Bank, you can log into the bank’s website to access your account for online banking. You can make payments, invest your fun
Read more