Flexi FDs, or Flexi Fixed Deposits, are a smart savings choice offered by banks that combine the stability of regular fixed deposits with added Flexibility. Fixed Deposits (FDs) have been a popular investment choice for Indians, as they offer secure and assured returns. But when it comes to making your financial plans more adaptable, Flexi FDs take the spotlight.
Unlike regular FDs with locked-in periods, Flexi Fixed Deposits allow individuals to access their money without the fear of penalties on premature withdrawals. Read on to discover all about Flexi FDs, with their features, benefits, and interest rates.
What is Flexi Fixed Deposit?
Flexi Fixed Deposits are special fixed deposits that offer the reliability of a traditional fixed deposit with the flexibility of a savings account.
Flexi FDs offer the best of both worlds – high-interest rates characteristic of fixed deposits and the convenience of on-demand liquidity similar to a savings account. This means that while your money grows at a fixed deposit rate, you can still tap into it, whenever an urgent financial need arises without paying a penalty, hence providing a level of convenience that regular FDs lack.
How to Open a Flexi FD Account?
To start a Flexi FD account, you’ll need to provide KYC documents like your PAN card, Aadhaar card and proof of address. Opening a Flexi FD account online is also an option, accessible through the bank’s website or mobile app.
During the account setup, you’ll specify a stipulated amount – the minimum balance you wish to maintain in your savings account.
What are the Benefits of Flexi FDs?
Flexi Fixed Deposits come with a range of benefits that make these deposits an attractive choice for investors:
- Minimum Investment Amount: You can decide your initial investment amount based on your preference and financial capability, with different banks having varying deposit criteria.
- High-interest Rates: Flexi FD schemes offer higher interest rates compared to savings accounts, enabling you to grow your savings more rapidly within a shorter duration.
- Flexible Tenure: Different banks provide various tenures for Flexi Fixed Deposit schemes, ensuring you can select a term that aligns with your financial objectives.
- Auto-renewal: Many banks offer auto-renewal options for Flexi FDs, simplifying the renewal process and ensuring you don’t miss out on interest earnings.
- Loan Facility: As an account holder, you often have the option to avail of loans against your Flexi Fixed Deposits, serving as collateral for short-term credit needs.
- Premature Withdrawal: Most banks permit you to make premature withdrawals from your Flexi Fixed Deposit account, ensuring you can access your funds when needed without penalties. They often also allow partial withdrawals, with the remaining amount continuing to earn interest until the term concludes.
What is Auto Sweep Flexi FD?
Auto Sweep Flexi FD includes a sweep-in feature, where any surplus amount in your account beyond a set threshold is automatically transferred into a fixed deposit for a predefined period, typically a year.
This means that with Auto Sweep Flexi FD, if the amount in your account goes beyond a certain limit that you set, the extra money automatically moves into a fixed deposit account. This fixed deposit gives you a higher interest rate than your regular account.
It’s suitable for those who prefer a hassle-free approach to managing their finances, as the system takes care of the automatic transfers between accounts.
Understanding Flexi FD Interest Rates
The Flexi FD interest rates are decided by the bank, and they may vary depending on the amount of money deposited, the tenure, and the terms and conditions of the deposit. Generally, longer tenure deposits might offer higher Flexi FD interest rates.
Many major banks in India offer the Flexi FD scheme with competitive interest rates. Take a look at the scheme offered by some of the top banks:
- Union Bank of India (UBI): UBI’s ‘Union Savings Flexi Deposit Account’ combines the benefits of fixed and savings deposits. With a tenure of 46 days to 1 year and a minimum balance requirement of Rs.50,000, this scheme caters to a diverse range of financial goals.
- Axis Bank: Axis Bank’s ‘Encash 24 Flexi Deposit’ assures liquidity similar to savings accounts and interest benefits akin to fixed deposits. The scheme term varies between 6 months and 5 years.
- State Bank of India (SBI): SBI’s Flexi Fixed Deposit Scheme requires a minimum deposit of Rs.5,000 and offers the convenience of customizable deposit amounts. It allows deposit customization through flexible instalments, providing added convenience to investors.
- Bank of India: ‘Star Flexi Recurring Deposit Scheme’ from Bank of India accommodates individual and joint accounts. The tenure for this plan varies from 12 months to 10 years, offering flexibility and ease of operation.
- ICICI Bank: ICICI Bank’s Flexi Deposit Scheme requires a minimum balance of Rs. 10,000 for savings accounts and Rs. 20,000 for current accounts. Tenure options span from 15 to 91 days.
The interest rates offered on Flexi FDs vary from bank to bank, so it is important to compare the different options before investing. To get the most accurate and up-to-date information about Flexi FD interest rates, it’s recommended to contact the bank you’re interested in or check the official website of the bank.
Flexi FDs stand as a tailored solution, addressing the evolving needs of depositors seeking growth, stability, and easy accessibility of funds. The unique combination of benefits makes Flexi Fixed Deposits an attractive investment choice.
If you are planning to invest in a Flexi FD, remember to review the bank’s terms, conditions, and applicable interest rates for your chosen amount and tenure.