Fixed Deposits are the most common investments people choose since they are low-risk. Most banks offer FDs with a lock-in period causing an inconvenience for investors. Flexi-Fixed Deposits are flexible FDs that allow you to liquidate your funds without attracting penalties. Prominent banks in India offer these schemes to their customers because of their appeal owing to the benefits.
A Flexi Deposit offers the benefits of a Regular FD and Demand FD scheme. Investors get higher returns than a regular deposit account and can withdraw like Demand FD or Savings Accounts. The following are the basics of the scheme:
Flexible tenures
Unlike regular FDs, these do not have an upper limit on the investment period. You get complete independence in selecting the tenure as per your financial goals. However, the duration varies between banks. You can directly invest funds from your Preferred Account into these and see your wealth multiply.
Higher interest
The interest rates offered on a Flexi Fixed Deposit are higher than a Savings Account. Investors can build a larger corpus on their savings for a shorter duration, increasing their savings and leading a secure and carefree future. Break the deposit whenever required without restrictions.
Minimum investment amount
Start your account with Rs. 10,000, and save in multiples of INR 1,000 up to a maximum of Rs. 1.99 crore for 374 days. You get complete liberty to choose the investment amount. However, ensure you select the right bank to invest the desired amount for a flexible tenure. The balance thresholds are Rs. 50,000, Rs. 2 lakh, and Rs. 5 lakh, depending on the Savings Account linked to the FD.
Liquidity
The funds invested are liquid. The FD gets liquidated in multiples of Re. 1, and your balance continues earning interest at the initial contracted rate. When several Fixed Deposits link to the Savings Account, the last one liquidates first to ensure maximum returns.
Loan facilities
Banks allow you to keep your Flexi FD scheme as collateral for short-term Loans. Applying for a Loan against the FD depends on the bank’s policies. However, you need not worry about paying extra charges to them as they already have the FD investment. You save the hassle of borrowing money from relatives. Instead, the savings in your FD work as collateral.
Auto-renewal
Banks allow Flexi Deposit Account holders to auto-renew their investment, making it stress-free for them towards the end of the term. If you choose the option of auto-renewal when you invest, it will get renewed automatically when the term ends.
Premature withdrawal
If you require funds urgently, you can partially withdraw them and receive interest on the remaining balance. When multiple FDs get linked to the Savings Account, the last FD breaks first to ensure maximum returns. These schemes are perfect for accomplishing short-term investment goals.
