There are so many avenues which lead to wealth generation. But each has its perks and vices. Now, it is up to the investor’s goals and suitability to choose the right path for them. A fixed deposit has been an extremely popular investment option among Indian investors. This is due to more than one reason – guaranteed returns, capital untouched by market fluctuations, higher interest rates than other banking investment options and varieties of FDs to choose from as per your requirements. One such variety is FD Double Scheme. Find out more about this category of FD in this blog.
As the name suggests, a Fixed Deposit Double Scheme aims to grow your wealth by two times. The scheme works by investing the interest earned and increasing the return. You need to invest a fixed sum for a predefined period. The bank would then double the investment in that particular period.
In this scheme, apart from the principal and tenure, the interest rate also stays stagnant throughout the tenure. However, this rate depends on your chosen tenure as the money has to double by the end of the term.
The interest rate usually varies between 4% to 8% and is compounded quarterly. This FD variation is just another example of wealth generation by utilising the power of compounding.
Here are some unique features of the Fixed Deposit Double Scheme:
The concept of doubling your money just got real with the FD Double Scheme. This is the option many investors are looking for, and opening an account is also a piece of cake. Just visit the nearest branch of your preferred bank or their official website if the bank offers online facilities.
This scheme offers an interest rate, which is usually higher than the regular fixed deposit rate of interest. It helps in doubling the fund over a certain period of time.
As an investor, you can choose your preferred tenure and investment capital. Most banks have criteria ranging between a few thousand and lakhs. Also, keep in mind the rate of interest depends on your chosen tenure.
The scheme further offers a cushion to avoid breaking your money banks during a financial crisis. Banks offer a loan against your FD deposit under such circumstances.
You have the facility to choose a nominee for the FD Double Scheme. In case of the untimely death of the account holder during the FD Double Scheme duration, the bank will pass on the fund to the nominee upon maturity.
FD double scheme is eligible for TDS deduction by the bank. However, there are certain conditions. If the interest earned in a financial year is more than INR 40,000 for regular citizens and INR 50,000 for senior citizens, the bank will deduct a 20% TDS. However, the percentage could decrease to 10% if you share your PAN details with the bank.
As the FD Double Scheme promises to double your money over a certain tenure, most banks are rigid about not allowing a partial withdrawal. However, even if some banks allow it, there will be a penalty. Hence, checking with the bank before opening an FD double scheme account is wise.
Apart from its distinctive features, the FD Double Scheme has some remarkable benefits. They are as given below:
The FD Double Scheme offers a higher rate of interest than regular FD. Additionally, for senior citizens, the rate can be even higher.
Fixed deposits are not affected by market fluctuations. Hence, you can be sure of your double returns at the end of your tenure.
You can claim tax benefits under Section 80C of the Income Tax Act 1961 against your Fixed Deposit Double Scheme investment. You can claim a tax deduction of up to INR 1.5 lakhs, an attractive feature of this scheme.
To ensure there are no complications later, you can use the FD Double Scheme calculator to find out the combination of tenure, rate of interest, and principal that works the best for you.
The following are the general criteria for FD double deposit:
- You can open a single or joint account
- Minors (age under 18) are eligible for this account
- Educational establishments are eligible to apply for this scheme
- Joint stock companies can also apply
- Clubs, partnerships and similar entities can apply for this scheme
The table below lays down the key differences between an FD double deposit and a regular FD:
|Parameters||FD Double Scheme||Regular FD Scheme|
|Benefits||Higher returns than regular FDs||Lower return than double deposit but higher liquidity and flexibility|
|Risk Level||Low to none||Low to none|
|Return||Doubled investment capital||Fixed return depending on the rate of interest|
|Interest Pay-out||Paid at maturity along with the principal invested||Paid out at maturity or periodic interval|
|Rate of Interest||Higher interest rate than regular FD||Lower interest rate than FD double deposit|
Here is a list of banks that offer an FD Double Deposit Scheme in India in 2023:
- State Bank of India (SBI)
- Punjab National Bank (PNB)
- HDFC Bank
- ICICI Bank
- Axis Bank
- Canara Bank
- Central Bank of India
- Bank of Baroda
- Indian Bank
- Union Bank of India
Here are some of the best FD double schemes you can choose from in 2023:
- SBI Fixed Deposit Double Scheme
- Axis Bank Double Advantage Scheme
- ICICI Bank Double Your Money Scheme
- IDBI Bank Double Money Scheme
- Tamilnad Mercantile Bank Double Deposit Scheme
- Canara Bank Dhanvarsha Double Deposit Scheme
- Post Office Fixed Deposit Double Scheme
- Bank of India Double Benefit Term Deposit
- Kisan Vikas Patra Scheme
- Bank of Baroda Double Dhamaka Fixed Deposit Scheme
FD Double Scheme is a lucrative investment option to double your money within a fixed tenure. Hence, if you have a lump-sum amount sitting at home, it will be wise to invest it in this scheme compared to other low-risk investment options available in the market.