Fixed deposits are one of India’s safest and most traditional investment options. It comes with a lock-in period, during which depositors/investors cannot withdraw their funds until maturity. There are several types of FDs, with flexi fixed deposit being one of them.
Keep reading to find out more details about a Flexible FD, its features and how it differs from regular fixed deposits.
Flexible Fixed Deposit Means
A flexible fixed deposit is a special scheme offered by some major Indian banks and financial institutions. As the name suggests, this scheme is highly popular for offering flexibility and convenience to all depositors/investors. Flexi FD can be considered as a combination of features of fixed deposits and savings or recurring accounts.
It provides individuals with the facility to deposit/withdraw money at any time as per their convenience and financial requirements. A Flexi FD scheme offers higher liquidity options like a regular savings account and attractive interest rates like a regular fixed deposit scheme.
Features & Benefits of Flexi Fixed Deposit
Here is a list of some of the salient features and benefits that depositors can avail of by opening a flexi fixed deposit account.
- Minimum Deposit Requirement – A flexi fixed deposit scheme comes along with a minimum deposit limit. This amount varies for different banks and financial institutions, depending upon their associated terms and conditions.
- Flexible Tenure Options – This type of fixed deposit scheme offers flexible tenure options to depositors/investors, suiting their financial goals and planning. Generally, the tenure of a flexi fixed account ranges between a few months and years.
- Partial Withdrawals – Under a flexi fixed deposit scheme, all entities are eligible to make partial FD withdrawals without breaking an entire deposit and losing the remaining interest income. This scheme enables easy liquidity of an investment without charging any penalty.
- Loan against Deposit – It provides a wide range of additional benefits, other than the above-mentioned ones, including a loan/overdraft against deposit facility. Through this scheme, you can avail financial assistance during any sudden emergencies.
- Higher Interest Rates – Flexi Deposit is an ideal financial instrument for investors who are looking for a smarter way to increase their wealth in place of regular savings accounts. This scheme typically offers higher interest rates, enabling your FD investment to grow faster.
- Safety and Security – Like regular FDs, Flexi Fixed Deposits are one of the low-risk investment options that are secure and insured, providing peace of mind to all investors/depositors.
Banks Offering Flexible FDs
Several reputable banks in the country provide Flexible Fixed Deposit options to their customers. Let’s take a look at some of the prominent banks that offer such schemes.
- State Bank of India – State Bank of India offers a flexi FD to all eligible entities, except minors and NRI individuals. Commonly known as SBI ‘Sarvottam’ (Non-Callable) Term Deposit, this scheme can be booked by investing a minimum deposit amount of ₹1,000.
- Axis Bank – Axis Bank provides a wide range of fixed deposit products, including Encash 24 Flexi Deposit. To avail of the benefits of this scheme, an individual must hold a savings account and provide valid PAN details to the bank.
- Union Bank of India – The Union Bank of India provides a Savings Flexi Deposit Scheme, which has the integrated features of a savings account along with a fixed deposit scheme. This scheme is only applicable to Indian Residents, non-government bodies and organisations/agencies.
- ICICI Bank – Although ICICI Bank offers a flexi fixed deposit scheme that provides higher earnings and flexible liquidity options, this scheme is only applicable to current account holders. Moreover, the existing customers must hold a minimum balance of ₹1,05,000 in their account to book this scheme.
- Allahabad Bank – Flexi Fix Deposit Scheme is one of the FD schemes offered by Allahabad Bank, allowing all Indian residents to earn maximum returns along with flexible liquidity options. To book this scheme, depositors need to invest a minimum FD amount of ₹25,000.
- Bank of Baroda – Under the Baroda Suvidha Flexible Fixed Deposit Scheme, a depositor/investor can avail of two different types of interest payout options from the Bank of Baroda. These rates vary, depending upon the tenure of their investment plan. Moreover, an individual can claim a loan against this FD investment, up to 95% of the value.
- Punjab National Bank – To avail of the above-mentioned benefits of flexi FDs, an individual can also opt for a Systematic Deposit Plan of the Punjab National Bank. Under this scheme, an eligible entity can book a joint account with other entities by investing a minimum amount of ₹100.
- IDBI Bank – Another addition to the list of top Indian banks offering flexi FD is the IDBI Bank’s Suvidha Fixed Deposit. The minimum deposit amount needed to open this type of FD account with the bank is ₹10,000. Under this scheme, the bank automatically credits the interest income into a depositor’s savings account at regular intervals, determined by himself.
- UCO Bank – One of the products of UCO Bank, the Flexible Fixed Deposit, is a matchless flexi FD scheme allowing depositors to encash a part of their investment without affecting the remaining part. Through this scheme, a depositor can make withdrawals in multiples of ₹5,000 only.
- Yes Bank – Yes Bank offers a convenient reinvestment option by formulating a Flexible Fixed Deposit scheme that is available in various tenures and rates. With minimal risk involved, this scheme provides additional benefits such as different interest payout options and preferential rates for senior citizens.
Flexi Fixed Deposit Interest Rates
| Bank | Tenure | Interest Rates |
|---|---|---|
| State Bank of India | 30 bps over the Card Rate for 1 year tenor and 40 bps over the Card Rate for 2 year tenor | 30 bps over the Card Rate for 1 year tenor and 40 bps over Card Rate for 2 year tenor |
| Axis Bank | 6 months to 5 years | Not specified |
| Union Bank of India | 6 months to 10 years | 5.25% to 6.70% |
| ICICI Bank | 15 to 91 days | 2.50% to 6.35% |
| Allahabad Bank | Not specified | Not specified |
| Bank of Baroda | 12 to 60 months | 6.75% to 7.55% |
| Punjab National Bank | 6 to 60 months | 5.50% to 8.05% |
| IDBI Bank | 7 days to 20 years | 3.00% to 7.00% |
| UCO Bank | 7 days to 5 years | 2.90% to 7.55% |
| Yes Bank | 7 days to 120 months | 3.25% to 8.51% |
Difference Between Flexi FD & Normal Fixed Deposits
While on one hand, Flexible Fixed Deposits and regular FDs both are safe and reliable investment options to grow your savings, they also differ in certain key aspects. We will now discuss some of these key aspects.
- Interest Rates: Under this scheme, a depositor/investor can avail higher interest rates as compared to regular or stand fixed deposit schemes.
- Withdrawal Flexibility: Flexi Fixed Deposits allow partial withdrawals without charging any penalty. On the other hand, most banks generally charge a penalty upon any premature withdrawal of an FD investment in the case of traditional FDs.
- Interest Calculation: When calculating the interest income earned from a regular FD investment, the applicable interest rate is applied to the principal amount and tenure. In contrast, the same amount is calculated by applying the applicable flexi fixed deposit interest rate on the remaining balance of a deposit after each withdrawal in the other case.
- Tenure Flexibility: A depositor/investor can avail more tenure flexibility from a flexi fixed deposit than compared to a regular FD. While the tenure varies for different banks and financial institutions, an individual can choose a suitable time period that aligns with their financial planning.
Conclusion
Flexi Fixed Deposits is a modern investment alternative to regular Fixed Deposits, catering to the evolving financial needs of several individuals. With liquidity, higher interest rates, and flexible withdrawal options, these accounts are an excellent choice for those looking to maximise their savings while maintaining financial control. However, make sure to compare the varying flexi fixed deposit schemes offered by different banks and make an informed decision based on your financial objectives and requirements.
FAQs
Yes, an individual can withdraw the entire amount of an FD investment in case of sudden emergencies. However, it is in their best interest to make partial withdrawals so that they can continue earning interest on the remaining balance.
No, the Flexi deposit interest rates do not remain fixed for the entire tenure of a Flexi fixed deposit scheme. Generally, the rate varies depending upon the associated terms and conditions of the bank and the remaining balance in the account.
Yes, most banks allow depositors/investors to open or book a Flexi Fixed Deposit account online through their online banking platform or official website.
In case an individual forgets the auto-renewal period of their flexi FD investment, the bank will convert the account into a regular savings/FD account with the same tenure.
All depositors/investors can withdraw their investment for a Flexi FD account anytime via the linked savings account with the bank.
Disclaimer
This article is solely for educational purposes. Stable Money doesn't take any responsibility for the information or claims made in the blog.
