Types of Fixed Deposit

Various types of Fixed Deposits (FDs) cater to your diverse needs. Standard FDs offer a fixed interest rate over a specified tenure. Tax-saving FDs provide benefits under Section 80C of the Income Tax Act. Senior Citizens FDs offer preferential rates to elderly investors. Additionally, Cumulative FDs compound interest, while Non-cumulative FDs pay regular interest pay-outs. Understanding these distinct FD types could empower you to make informed financial decisions aligned with your goals and preferences.

Key Takeaways

Standard FD: Lump sum investment, flexible tenure (7 days to 10 years), interest varies with tenure. Suitable for individuals below 60

Tax-Saving FD: Lock-in of 5 years, offers tax deductions under Section 80C, no premature withdrawals

Senior Citizens FD: For individuals aged 60 and above, higher interest rates than standard FDs, favourable TDS limit of ₹50,000

NRI FDs: NRE for tax-free interest, NRO with taxable interest at 30%. Choose based on financial needs and tax situation

Recurring FDs: Monthly savings over 12 to 60 months, ideal for incremental savings with a regular income

Flexi Deposits: Linked to savings account, excess funds automatically converted to FD, balancing savings and liquidity

Corporate FDs: Higher interest rates, higher risk due to issuance by corporations. Requires thorough research

Special FDs: Offered for specific time periods, higher interest rates, attractive for maximising returns within a timeframe

Floating FDs: Interest rates change quarterly or yearly, potential to benefit from fluctuating rates. Evaluate based on market conditions

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Floating Fixed Deposits have changing interest rates quarterly or yearly, allowing you to benefit from fluctuations. This flexibility can be advantageous in dynamic market conditions.

A recurring deposit suits beginners well. It allows you to save small amounts monthly, gradually building savings over time without the pressure of a large lump sum.

Flexi Deposits, linked to your savings account, automatically convert excess funds into fixed deposits, maximising savings with liquidity. It's a convenient way to manage money efficiently, especially for those with fluctuating balances.

While Corporate FDs may offer higher interest rates, they come with higher risks as they are issued by large corporations. It is advisable that you conduct thorough research and consider your risk tolerance before investing.

NRE FDs are in foreign currency with tax-free interest, while NRO FDs are in Indian currency with taxable interest at a 30% rate. NRIs can choose based on their financial needs and tax situation.

Bajaj Finserv Direct Limited ("Bajaj Markets") offers to its customers, various financial products and services through its digital platform as a registered Corporate Agent with IRDAI, registered Investment Adviser with SEBI, registered Third-Party App Provider (UPI payments), and as DSA or Digital lending platform of its Partners. Further, Bajaj Markets also offers a marketplace e-commerce platform to facilitate transactions between customers and sellers on-boarded on the platform. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522 Corporate Agency (Composite) Registration no.CA0551 (valid till 10-Apr-2027) Investment Adviser, SEBI registration: INA000016083 (Validity - Aug 11, 2021 - Perpetual)

Types of Fixed Deposit

Key Takeaways

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