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 The main feature of Fixed Deposit account is that the funds cannot be withdrawn for a fixed period of time.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

Institution Interest per annum Duration Investment Required Investor Type Tax Status
Yes Bank 7.15 18 Months 8 Days to 18 Months 18 Days Less than Rs. 1cr General Taxable
Bandhan Bank 7.15 Above 1 year to less than 2 years Less than Rs. 1 cr General Taxable
Indus Ind Bank 7.15 1 year to below 1 years 2 months Less than Rs. 15 lakh General Taxable
Axis Bank 7.00 16 months to less than 17 months Less than Rs. 1 cr General Taxable
Union Bank of India 7.00 1 years Less than Rs. 1 cr General Taxable
Punjab National Bank 6.90 1 year Less than Rs. 1 cr General Taxable
Oriental Bank of Commerce 6.85 1 year to less than 2 years Less than Rs. 1 cr General Taxable
Dena Bank 6.80 Above 1 year to less than 2 years Less than Rs. 1cr General Taxable
HDFC Bank 6.80 1 year 1 day – 1 year 3 days Less than Rs. 1 cr General Taxable
ICICI Bank 6.75 1 year to 389 days Less than Rs. 1 cr General Taxable
Canara Bank 6.75 1 year Less than Rs. 1cr General Taxable
UCO Bank 6.65 1 year less than Rs. 1 cr General Taxable
Allahabad Bank 6.60 1 year to less than 2 years Less than Rs. 1 crore General Taxable
Central Bank of India 6.60 1 year to less than 2 years Less than Rs. 1cr General Taxable
Syndicate Bank 6.50 1 year exact Less than Rs. 1cr General Taxable
State Bank of India (SBI) 6.50 456 days to less than 2 years Less than Rs. 1 cr General Taxable
HSBC 6.25 400 days Less than Rs. 1cr General Taxable
Citi Bank 5.25 401 days to 540 days Less than Rs. 1 cr General Taxable

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 Plans Entry Age (Min/Max) Policy Term (Min/Max) Sum Assured (Min/Max)
Aegon Life iTerm Plan 18/75 years 5/40 years 10 Lacs/NA
Aviva I-Life Plan 18/55 years 10/35 years 25 Lacs/NA
Bajaj AllianziSecure 18/70 years 10/30 years 20 Lacs/NA
Bharti AXA eProtect Term Plan 18/75 years 10/30 years 25 Lacs/NA
HDFC Click2Protect Plus 18 /65 years 10/30 years 10 Lacs/10 Crores
HDFC Life Sanchay 30/45 years 15/25 years 1,05,673/NA
HDFC SL Crest 14/55 years 10/10 years (7 or 10) x Annual Premium/20 x Annual Premium
ICICI Pru iProtect 20/75 years 10/30 years 3 Lacs/NA
Kotak Life Preferred e-Term 18/75 years 10/40 years 25 Lacs/NA
LIC AmulyaJeevan 18/60 years 5/35 years 25 Lacs/NA
LIC New JeevanAnand 18/50 years 15/50 years 1 Lac/NA
LIC Term Plan 18/75 years 10/35 years 50 Lacs/NA
Max Life Online Term Plan 18/70 years 10/35 years 25 Lacs/100 Crores
SBI eShield Plan 18/70 years 5/30 years 20 Lacs/NA
SBI ShubhNivesh Plan 18/60 years 5/30 years 75000/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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