Different Types of Fixed Deposits

A Fixed Deposit (FD) or a term deposit lets you deposit a fixed sum for a specific tenure and earn risk-free returns. It is one of the best options to safely grow your wealth. FDs are often classified based on their features, benefits, limitations, and withdrawal flexibility. It is important to opt for a fixed deposit that suits your requirements so that you can make the most of your FD investment.

Read More: - What is Fixed Deposit

Let’s understand different types of Fixed Deposits:

• 1. Standard FDs

You can park your money in Standard FDs for a fixed term ranging from 7 days to 10 years. The pre-defined, fixed interest rate is higher than that of a Savings Account. If you wish to withdraw money from the FD before maturity, you will be charged a penalty. Instead, you can avail a loan or use overdraft facilities against the FD in case of emergency.

• 2. Tax-saving FDs

The top benefit of investing in tax-saving FDs is that you can claim a tax deduction of up to INR 1.5 lakh. The FDs come with a 5-year lock-in period, and you cannot withdraw money from this FD prematurely.

• 3. Cumulative FDs

Cumulative FDs are fixed deposit investments in which you get your earned interest only upon maturity. This FD type is good for you if you are not looking for any regular income from your FD and want more returns on your investment.

• 4. Interest Payout FDs

For this type of FD, the interest is earned on the principal amount. The tenor for non-cumulative FDs is the same as cumulative FDs. This kind of FD can help you meet your regular expenses with its regular interest pay-outs on monthly/quarterly basis.

• 5. Senior Citizen FDs

Senior Citizen FD is available only to individuals above 60 years of age. The main highlight of the FD scheme is that seniors get a higher rate of interest. For instance, AU Small Finance Bank offers up to 0.50%* extra interest that is over and above the regular FD interest rates. Seniors can select either monthly or quarterly pay-out options to ensure regular income flow.

• 6. Flexi FDs

Flexi FDs offer you the flexibility and convenience of an FD as well as a savings account by merging the features and benefits of both investment options. You get the liquidity of savings accounts and the higher interest rates of FDs with Flexi FDs.

How to select the right FD?

Below are the steps to choose the right type of Fixed Deposit account:

• First, you need to evaluate your investment objective & then select the type of FD account. For instance, if your goal is to invest as well as save taxes, then you can opt for a 5-year Tax Saving Account.
• Look for high-interest rate earning opportunities. You can earn monthly/quarterly payouts on AU Small Finance Bank’s Regular Fixed Deposit Account. 
• Select an FD that lets you avail loan facility against the account. AU Small Finance Bank Fixed Deposit investment lets you avail overdraft facility in case of emergency.
• In case you want to do a premature withdrawal, you should check for the withdrawal charges set by the bank.

Apply for FD Online with AU Small Finance Bank

AU Small Finance Bank offers different types of Fixed Deposits, including Regular Fixed Deposit Account, 5-Year Tax Saving Fixed Deposit & Sweep-in Facility. You can apply for a Fixed Deposit online via our AU 0101 App / NetBanking, Video Banking facility, or visit a branch to apply in person.