Step By Step Guide To Open A Fixed Deposit (FD) Account

2 years ago Gino Hawkins

Fixed deposits remain a preferred investment avenue for many thanks to guaranteed returns, flexibility of tenure, and low risk. However, navigating the account opening processes without awareness can seem tedious. Whether you choose to open fixed deposit online or offline modes, being aware of the required procedures for documentation, contribution amounts, assessing frank terms, etc., from the beginning will help ensure a smoother journey.

Read on to learn about open fixed deposit online or in banks seamlessly. Follow these steps to unlock the stability and prosperity fixed deposits bring.

Understanding Fixed Deposits

A fixed deposit or term deposit refers to a financial instrument offered by banks and NBFCs allowing the deposit of money for a fixed interval ranging from 7 days to 10 years. In return for locking funds, fixed interest is paid by the institution at predetermined rates for the FD tenure. Fixed deposits provide stable income sans volatility, especially for risk-averse investors. Interest pay-outs options can be monthly, quarterly, or cumulative, while premature withdrawals also attract charges.

Besides regular FDs, specialised variants like tax-saving FDs with lock-ins, high-return FDs for seniors, and online FDs with enhanced liquidity cater to specific investor segments. Each has unique merits around returns, flexibility, and accessibility that account openings must align to.

Eligibility Criteria for Opening an FD

The criteria that must be met in order to be eligible for open FD are as follows:

Adult individuals needing valid ID proof
Minors above age 10+ with guardian consent and paperwork
HUFs, trusts, and organisations requiring company identification
Minimum investment amounts vary from Rs 100 to Rs 5000 across banks
NRI investors can also open FDs depending on the chosen type – NRO vs. NRE

With easy norms, FDs allow investors of varied entity types to determine the feasibility of fixed earnings potential from leading public and private banks.

Step 1: Documents Required to Open an FD

To open FD, you will need to provide standard KYC documents. These documents are required both for in-branch and online account opening:

Fill out the FD application form as issued by the bank
Self-attested authorised Identity proof – Aadhaar, PAN, Passport, etc
Self-attested valid residence proof – The electricity bill, Rent Agreement, etc
Recent photograph signed across in application form format
Other documents like digitally signed E-Mandate for NACH may be warranted

Step 2: Deciding Deposit Amount and Tenure

Choosing optimal FD investment tenures spanning from 7 days to 10 years requires evaluating the following:

Associated applicable FD interest rates across different tenures
Minimum deposit commitments warrant a glance through
Lock-in rules for specialised tax-saving FDs with 5-year terms
Liquidity needs to determine the duration of unavailability of funds

Step 3: Choosing the Right Bank

Specifying the parameters that need to be considered for selection assessment.:

Returns being offered across tenure – highest wins
Credibility of bank or institution on stability and service parameters
Minimum investment commitments warrant evaluation
Customer service responsiveness
Accessibility of account management functionalities is key

Assess holistically across offerings before deciding the optimal FD provider.

Step 4: How to Open an FD Account Offline

Below is a step-by-step guide on how to open a fixed deposit account by visiting a bank branch:

Obtain FD application form and sheets detailing returns across tenures
Fill in details like amount, tenure, pay-out choice, and personal details in the application
Attach KYC documents like ID proof, residence proof, photos, etc
Approach the relevant desk for form submission along with a cheque covering the amount
Upon verification of documents, a provisional FD receipt is issued
Cheque clearance leads to final FD creation reflected in statements

Step 5: Online FD Account Opening Process

Here are some simple and convenient steps to follow on how to open a fixed deposit account online:

Log in to net banking or fintech portal using credentials
On the dashboard, click on the “Open FD” tab visible prominently
Input the amount you wish to deposit towards the FD
Select desired tenure ranging from 7 days to 10 years
Submit details and confirm the account holder’s name and operational aspects
Make payment via net banking or UPI instantly
FD confirmation receipts reflecting numbers and projections are instantly issued

Step 6: Understanding Terms and Conditions

Assess applicable FD rates basis chosen tenure and amount
Understand penal charges applicable around 1% for premature withdrawals
Explore loan against FD possibility up to 75-90% of the deposit amount
The auto-renewal facility ensures enhanced returns for renewed terms
Partial withdrawal flexibility allows liquidity management

It is recommended that you read all the details carefully before placing anything to optimise your experience.

Conclusion

Fixed deposits offer a feature to varied investor needs, from risk-free assured returns to loan flexibility alongside overriding stability. Perusing processes for account openings, documentation norms, and operational nuances in advance aids smooth journeys whether pursuing online or offline FD investment channels. Follow the step-by-step guides, choose suitable providers after thorough research, and commence your FD investment journey for securing future prosperity following financial prudence.