What is Fixed Deposit? A Guide for Fixed Deposit Schemes

It is a financial instrument offered by banks or NBFCs which provide investors a high rate of interest than a regular savings account till a given or decided maturity date. You may or may not need to create a separate account. The main feature of Fixed Deposit account is that the funds cannot be withdrawn for a fixed period of time. Tenure or term has a predetermined allotted interest rate.

What is Fixed Deposit Schemes?

Here are the schemes available to buyers in Fixed Deposits-

Simple Fixed Deposits

These are the standard deposits that provide a range of tenures, from 7 days to years.

Special Fixed Deposits

These are the special tenure deposits. These allow you to invest money for a special period such as 190 days, 290 days, 390 days and so on.

Tax Saving Fixed Deposits

Tax saving fixed deposits gives you benefits under section 80C of the Income Tax Act; the interest earned on Fixed Deposits is completely taxable.

Benefits of Having Fixed Deposit Account

Investing in Fixed Deposits is the easiest way to multiply your money. Fixed Deposits are the safest investment option and offers several benefits.

  • These encourage a habit of saving money in a person.
  • There is higher interest rate than a regular Savings Account.
  • For your investment, you get assured returns.
  • You can choose to receive the interest paid monthly, annually or at maturity.
  • You can invest your money for 30 days to 10 years.
  • You can have more than one Fixed Deposit Account.

Best Fixed Deposit Rates Offered in India

InstitutionInterest per annumDurationInvestment RequiredInvestor TypeTax Status
Yes Bank7.1518 Months 8 Days to 18 Months 18 DaysLess than Rs. 1crGeneralTaxable
Bandhan Bank 7.15Above 1 year to less than 2 yearsLess than Rs. 1 crGeneralTaxable
Indus Ind Bank7.151 year to below 1 years 2 monthsLess than Rs. 15 lakhGeneralTaxable
Axis Bank7.0016 months to less than 17 monthsLess than Rs. 1 crGeneralTaxable
Union Bank of India7.001 yearsLess than Rs. 1 crGeneralTaxable
Punjab National Bank6.901 yearLess than Rs. 1 crGeneralTaxable
Oriental Bank of Commerce6.851 year to less than 2 yearsLess than Rs. 1 crGeneralTaxable
Dena Bank6.80Above 1 year to less than 2 yearsLess than Rs. 1crGeneralTaxable
HDFC Bank6.801 year 1 day – 1 year 3 daysLess than Rs. 1 crGeneralTaxable
ICICI Bank6.751 year to 389 daysLess than Rs. 1 crGeneralTaxable
Canara Bank6.751 yearLess than Rs. 1crGeneralTaxable
UCO Bank6.651 yearless than Rs. 1 crGeneralTaxable
Allahabad Bank6.601 year to less than 2 yearsLess than Rs. 1 croreGeneralTaxable
Central Bank of India6.601 year to less than 2 yearsLess than Rs. 1crGeneralTaxable
Syndicate Bank6.501 year exactLess than Rs. 1crGeneralTaxable
State Bank of India (SBI)6.50456 days to less than 2 yearsLess than Rs. 1 crGeneralTaxable
HSBC6.25400 daysLess than Rs. 1crGeneralTaxable
Citi Bank5.25401 days to 540 daysLess than Rs. 1 crGeneralTaxable

What is Life Insurance?

It is an agreement between two parties namely, an insurance company and policy holder where the insurance company assures to pay an assured sum of money to the nominated beneficiary in case of sudden unfortunate demise of policy holder during the stipulated time period of the policy. In exchange, the policy holder pays premium either on lump sum basis or regularly. Some conditions like critical illness or terminal illness and others may affect the payment of benefit.

what is life insurance

Types of Life Insurance Plan

There are three different types of Life Insurance Policies

Term Life Insurance

This provides financial protection for a specific time period such as 10 years or 20 years. After this, policies may provide continued coverage, at a higher rate of premium.

Universal Life Insurance

It gives you lifetime coverage. This policy is flexible enough to allow you to increase or decrease your premium amount throughout the lifetime.

Whole Life Insurance

This also provides you lifetime coverage. This has a cash value and tax-deferred savings component.

Life Insurance Policies Available in India

Life Insurance PlansEntry Age (Min/Max)Policy Term (Min/Max)Sum Assured (Min/Max)
Aegon Life iTerm Plan18/75 years5/40 years10 Lacs/NA
Aviva I-Life Plan18/55 years10/35 years25 Lacs/NA
Bajaj AllianziSecure18/70 years10/30 years20 Lacs/NA
Bharti AXA eProtect Term Plan18/75 years10/30 years25 Lacs/NA
HDFC Click2Protect Plus18 /65 years10/30 years10 Lacs/10 Crores
HDFC Life Sanchay30/45 years15/25 years1,05,673/NA
HDFC SL Crest14/55 years10/10 years(7 or 10) x Annual Premium/20 x Annual Premium
ICICI Pru iProtect20/75 years10/30 years3 Lacs/NA
Kotak Life Preferred e-Term18/75 years10/40 years25 Lacs/NA
LIC AmulyaJeevan18/60 years5/35 years25 Lacs/NA
LIC New JeevanAnand18/50 years15/50 years1 Lac/NA
LIC Term Plan18/75 years10/35 years50 Lacs/NA
Max Life Online Term Plan18/70 years10/35 years25 Lacs/100 Crores
SBI eShield Plan18/70 years5/30 years20 Lacs/NA
SBI ShubhNivesh Plan18/60 years5/30 years75000/NA

Conclusion

Fixed Deposits provide a high rate of interest to the investor for a determined maturity period. In this one cannot withdraw money for a fixed period of time. Life insurance provides financial security to the family in case of sudden demise of the policy holder. The policy holder needs to pay premium regularly or on lump sum basis.

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About FinanceGAB

Ajeet Sharma is a financial blogger and I am blogging since 2017. Financegab is a personal blog dedicated to personal finance. The main aim of this blog to help people to make well-informed financial decisions.
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