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What Are The Various Types Of Fixed Deposits In India?

Published On Dec 10, 2021 10:00 AM By InsuranceDekho

Fixed deposit accounts are ideal for investors who are averse to taking risks. Interest is accumulated on the deposited amount over a fixed period of time. The interest rate for deposits less than Rs.2 crore range from 3.00% p.a. (for deposits less than one year) to 9.54% p.a. (for deposits of up to 10 years). This depends on the type of financial institution as well (public sector, private sector, or small finance banks). The tenure can range from 7 days to 10 years. Senior citizens are offered higher interest rates. This is usually in the range of 0.25% to 0.65% more than the existing rates.

Types of Fixed Deposits

Normal Fixed Deposits

  • Deposit money for a fixed tenure.
  • Tenure can range from 7 days to 10 years.
  • Interest rates higher than a normal savings account.

Tax-Saving Fixed Deposits

  • Tax exemption on the principal deposit amount of up to Rs.1.5 lakh in a calendar year.
  • Lock-in period of 5 years within which you cannot withdraw the amount.
  • Allows only one-time lump sum deposit.

Senior Citizen Fixed Deposits

  • Applicable for individuals above 60 years of age.
  • Senior citizens are eligible for special rates.
  • Flexible tenures.

Cumulative Fixed Deposits

  • Interest is compounded every quarter or year and paid at the time of maturity.
  • Helps substantially grow your savings.

Non-Cumulative Fixed Deposits

  • Interest is paid out monthly, quarterly, half-yearly, or annually, as per your choice.
  • Better bet for pensioners looking for a regular source of income.

Flexi Fixed Deposits

  • Fixed deposit linked to your bank account.
  • Money shuttles between your FD and savings account.
  • Fixed Deposit by Other Banks

Features of a Fixed Deposit Account

  • Safer than other investment vehicles.
  • Lets you earn interest over a fixed period of time.
  • Flexible tenures of up to 10 years.
  • No cap on the maximum deposit.
  • Additional rates for senior citizens.

Eligibility Criteria for FD investment

The following entities are eligible to open an FD account in India:

  • Indian resident
  • NRI
  • Minors
  • Senior citizens
  • Companies
  • Partnership firms
  • Individuals or joint investors
  • Societies or clubs
  • Sole proprietorship

Documents Required For Opening An FD Account

The documents required for opening an FD account are as given below:

  • Proof of identity: Voter ID, PAN card, Aadhaar card, driving license, photo ration card, senior citizen ID card, etc.
  • Proof of address: Utility bills, bank statement with cheque, Post-office issued identification card or certificate, etc.


Fixed deposits are safe because the returns are not affected by fluctuations in the stock markets. Also, the Reserve Bank of India provides insurance for up to Rs.1 lakh of your fixed deposit in the event of a banking crisis.

Also read: 

Top 5 Fixed Deposit Schemes in India

Reasons Why Fixed Deposit Should Be In Your Investment Portfolio

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.   

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