Types of Fixed Deposit to Choose in India

FDs are one of the most well-liked types of investments. A corpus is parked in an FD account, where it earns interest at a fixed rate. Your returns are dependable because the interest rate on FDs is fixed.

 

Types of Fixed Deposits

Standard FDs

For a fixed duration that can be anything from seven days to ten years, the investor parks his money in this FD account. The interest rate is higher than a typical savings account because it is fixed and predetermined. You can use conventional FDs as collateral for loans and overdrafts. You can also take a withdrawal before the account matures, but there will be a fee.

Tax-Saving FDs

These FDs have a five-year lock-in term that is required, thus early withdrawals are not permitted. Additionally, there are no loan or overdraft options for tax-saving FDs. However, section 80C of the Income Tax Act allows you to request tax exemptions of up to Rs 1.5 lakh.


Types of Fixed Deposit to Choose in India


Senior Citizen Fixed Deposit Scheme

A term plan with special interest rates is the senior citizen fixed deposit plan. This plan gives an interest rate that is 0.5% higher. You can select a senior citizen fixed deposit arrangement if you are older than 60. It has a feature of a regular pay-out option where you can make a consistent and reliable income to conveniently meet your daily financial needs. A senior citizen can also borrow money from the Senior Citizen Savings Scheme in times of need (SCSS).

Corporate fixed deposits

Investors frequently choose company fixed deposits as their investment. In comparison to banks and NBFCs, this sort of fixed deposit offers a greater interest rate. The danger increases along with the interest rate. Always make investments after reviewing the fixed deposits' ICRA credit ratings. It aids in estimating the level of risk associated with investing in any corporate fixed deposit.

NRI Fixed Deposits

In India, NRE fixed deposits and NRO fixed deposits are the two main types of NRI deposits. Such accounts are available for a defined term at higher interest rates to NRIs, PIOs, etc. Additionally, it should be mentioned that payments for such accounts must come from NRO bank accounts via NEFT or RTGS.

You have a lot of possibility with FDs since you have the freedom to select an appropriate type of FD, secure your investment with nearly no risk, and receive guaranteed returns.



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