What are the advantages of a Digital FD?

Fixed deposit accounts are the most popular form of investment in India today, since they offer guaranteed returns to customers at a fixed interest rate. Banks are now moving towards digital FDs that offer the same advantages with increased access and security.

What are online FDs and how are they different from regular fixed deposit accounts?

Online fixed deposit (FD) accounts are FD accounts that are opened following a completely online application procedure. Customers can access and manage these FDs directly through their bank’s dedicated mobile banking app – for instance, IDFC FIRST Bank’s mobile banking app – or through net banking. Digital FDs also offer attractive interest rates and better access to customers when it comes to managing their finances from the comfort of their homes. 

What are the advantages of a digital fixed deposit account?

The following are the benefits of opening a digital fixed deposit account in 2024:

Customers can easily access their online FD accounts

Banks have made accessibility a priority to help their customers access banking services more conveniently. This is especially true for IDFC FIRST Bank with them offering easily redeemable online FDs to customers at high interest rates. An IDFC FIRST Bank customer can conveniently access their fixed deposit account details through the IDFC FIRST Bank mobile banking app. 

They can monitor and manage their FD accounts in real time

 
Mobile banking apps help customers manage their online FD accounts efficiently. IDFC FIRST Bank customers, for instance, can check the details of their FD investment at any hour of the day and can monitor their performance. They can also check the interest earned and access their account information at any time.

Online FD accounts offer financial security and stability to customers

One of the major advantages of fixed deposit accounts is the predictable manner in which they can help grow one’s wealth. Online FDs protect individuals from market instability and thereby minimise overall risk. FDs also offer fixed returns which makes them a favourable mode of investment among risk-averse investors.

Online FDs offer higher returns and flexibility to customers

Banks like IDFC FIRST Bank have focused on making their online FDs more flexible for individuals. IDFC FIRST Bank customers can choose an FD tenure ranging between seven days and ten years, based on their financial goals. The bank also offers a regular interest payout to the customer through its fixed deposit accounts. Online FD accounts also help customers earn higher returns.

Customers can choose to automatically renew their online FDs upon maturity

While booking an online FD, a customer can choose to reinvest their FD returns in the FD by by choosing the ‘Auto renewal’ optionThis helps customers accrue interest automatically, so they do not have to worry about remembering to reinvest their earnings upon maturity.

Banks offer customers competitive interest rates through their digital FDs

IDFC FIRST Bank’s online FDs offer an attractive annual interest rate to regular depositors and a higher rate for senior citizens. This feature, combined with the convenience of online banking, helps customers steadily grow their wealth over time. Another investment opportunity offered by IDFC FIRST Bank is the newly-launched Digital’  fixed deposit -  a unique fixed deposit that customers can open even without having an existing savings account with the bank. These fixed deposits offer competitive interest rates and have a simplified, efficient and quicker online journey where customers can book their fixed deposits in  minutes, above industry average time that an online FD takes . The investment amount is flexible too, ranging from Rs. 5,000 to Rs. 90,000, which customers can choose depending based on their preference.

Customers can use an online FD returns calculator to calculate their overall returns upon their FD maturity dates. Doing so can help them plan their FD investments and decide on the right investment amount. Customers can also choose to spread their investment amounts across multiple FDs and adopt the laddering strategy to benefit from higher returns and regular liquidity

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.