When you invest money, your one and only agenda is to get better and higher returns. Nowadays, investing money in fixed deposits is popular for individuals/couples looking for secure and stable returns. One such type of fixed deposit that offers unique advantages is non-callable fixed deposits. In this article, we will explore non-callable deposits, their features and benefits, why you should consider them, and which banks offer these deposits based on their suitability as an investment option.
What are Non-Callable Fixed Deposits?
Non-callable fixed deposits refer to fixed deposits that cannot be redeemed or called back by the issuing bank before their maturity period. Unlike regular fixed deposits, where banks can recall the deposit at any time, non-callable FDs assure investors that their funds will remain locked in for the agreed-upon tenure, regardless of any changes in interest rates or market conditions.
Non-Callable FD Details
| Features | Particulars |
| Minimum Deposit | ₹15.01 Lakh |
| Maximum Deposit | No Limit For NRE Account – ₹2 Cr |
| Duration | Minimum – 12 Months Maximum – 120 Months |
| Rate of Interest | Deposits below ₹2 Cr – 25bps Deposits of ₹2 Cr & above – 10bps |
| Nomination facility | Available |
| TDS | Yes, TDS will be deducted on interest earned as per the rules |
For the latest rates, please refer to the latest circular regarding the Rate of Interest.
Additional interest to Senior Citizens & Staff members (including ex-staff & Retired Staff Members who are Senior Citizens) will continue as per guidelines effective from time to time.
Features of Non-Callable FDs
Non-callable fixed deposits come with several distinct features that make them an attractive investment option. Let’s take a closer look at some of these features:
1. Locked-in Tenure
Non-callable FDs have a predetermined tenure, during which the invested amount remains locked in. This feature ensures that investors can enjoy a fixed interest rate for the entire deposit duration, offering stability and predictability in returns.
2. Fixed Interest Rates
Unlike other investment options that are subject to market fluctuations, non-callable fixed deposits provide investors with fixed interest rates. This means that regardless of any changes in the market, the interest earned on the deposit remains consistent throughout the tenure.
3. Capital Protection
Non-callable deposits are considered a safe investment choice as they provide capital protection. This means that the principal amount invested is secure and will be returned to the investor in full at the end of the tenure, along with the accumulated interest.
4. Regular Interest Payouts
Investors can choose to receive regular interest payouts from their non-callable fixed deposits. This feature allows individuals to supplement their income or fulfil their financial obligations by receiving periodic interest payments.
Benefits of Non-Callable Fixed Deposits
Investing in non-callable deposits offers several advantages for individuals seeking stable returns and capital protection. Let’s explore some of these benefits:
1. Stability and Security
Non-callable fixed deposits provide a sense of stability and security to investors. With a fixed interest rate and a locked-in tenure, individuals can plan their finances effectively and have confidence in the returns they will receive.
2. Assured Returns
Investors can enjoy assured returns with non-callable deposits. Since the interest rates are fixed, individuals know exactly how much they will earn over the deposit’s tenure, allowing them to make informed financial decisions.
3. Diversification of Portfolio
Including non-callable fixed deposits in one’s investment portfolio helps diversify risk. By allocating a portion of funds to fixed deposits, investors can balance their portfolios and mitigate potential losses from other volatile investment avenues.
4. Flexibility in Interest Payouts
Non-callable FDs offer flexibility in interest payouts. Investors can choose to receive interest monthly, quarterly, half-yearly, or annually, depending on their financial requirements and goals.
Why Should You Opt for Non-Callable FDs?
If you are wondering why you should consider investing in non-callable deposits, here are a few compelling reasons:
1. Steady Income
Non-callable FDs provide a steady and predictable income stream, making them ideal for individuals seeking regular returns.
2. Capital Preservation
With non-callable fixed deposits, your invested capital is protected, ensuring that your savings remain intact.
3. Risk Management
Including non-callable fixed deposits in your investment portfolio can help manage risk by diversifying your assets and reducing exposure to volatile markets.
4. Flexibility
Non-callable FDs offer flexible tenure and interest payout options, allowing you to tailor your investment to your specific needs.
Top Banks Offering Non-Callable Fixed Deposits
Several banks and financial institutions offer non-callable FDs. Here are some prominent ones:
- Axis Bank
- Bank of Baroda
- ICICI Bank
- SBI
- Union Bank
- Indian Bank
- Suryoday Bank
- Shivalik Bank
It is advisable to research the terms and conditions, interest rates, and customer reviews of different banks before choosing the one that suits your investment goals.
Conclusion
Fixed deposits are an excellent investment option for individuals looking for stability, capital protection, and assured returns. By allocating a portion of your savings to non-callable fixed deposits, you can diversify your portfolio, mitigate risk, and enjoy the benefits of a secure and lucrative investment avenue.
Invest wisely and consult with a financial advisor to determine the suitability of non-callable FDs based on your financial goals and risk appetite.
FAQs
No, non-callable deposits cannot be withdrawn before the maturity period. The funds remain locked in until the agreed-upon tenure is completed.
Yes, the interest earned on non-callable fixed deposits is subject to taxation per prevailing income tax laws. It is advisable to consult a tax professional for accurate information regarding tax implications.
The minimum investment amount for non-callable fixed deposits varies from bank to bank. Checking with the respective bank for their minimum deposit requirement is recommended.
Yes, non-callable fixed deposits are generally covered under deposit insurance schemes offered by regulatory authorities. However, verifying the coverage limits and terms with the respective bank is essential.
Yes, most banks allow individuals to avail of loans against non-callable fixed deposits. The loan amount is typically a percentage of the deposit’s value, and the interest rate is comparatively lower due to the collateral provided.
