The Future of Fixed Deposits: Online Fixed Deposit Accounts

The concept of online fixed deposit accounts, also referred to as digital fixed deposit accounts is gaining more popularity in India, as more people are opting for an online FD account opening process. These are more accessible versions of the erstwhile FDs that also offer high returns and better access to customers. Read on to learn about how you can grow your FD returns through a strategy called the FD laddering strategy.

What are digital fixed deposit accounts and how do they work?

A digital fixed deposit (FD) account is an FD account that can be opened through a paperless, online procedure. It is a safe and risk-free investment that offers all the advantages of a traditional FD – including stable and guaranteed returns – with the added convenience of higher accessibility.  

Advantages of opening an FD online

Here are all the advantages that you can benefit from by opening an online FD account today:

You can benefit from competitive interest rates by choosing a digital FD

Banks offer competitive interest rates through their online FDs. Along with the attractive interest rates and features, IDFC FIRST Bank also offers a higher FD rate for senior citizens. In addition to this feature, IDFC FIRST Bank’s FDs offer monthly interest credits to customers which helps them increase their savings.

Online FDs offer flexible tenures and higher returns

IDFC FIRST Bank customers benefit from flexible tenures while investing in an online fixed deposit account. Customers can book an FD with a tenure ranging between 7 days and 10 years, depending on their investment objective. IDFC FIRST Bank’s online FD calculator can help investors know the value of their FD amount on maturity, and thereby help them plan their FD investments effectively.

An online FD account is more secure

Online FD accounts can be accessed through secure mobile banking apps, like the IDFC FIRST Bank mobile banking app. You can securely access your FD account and manage it at any hour of the day through the app.

You can choose to automatically renew your online FDs

A major advantage of opening an online FD account is the option of automatic FD renewals. Customers need not remember the maturity dates of their FDs to reinvest their returns into the FD and can now automate the payments towards their online FD investments.

Online FD accounts offer higher accessibility to customers

Mobile banking apps have helped customers conveniently access all banking services including fixed deposit accounts. IDFC FIRST Bank customers can easily access their online FD accounts through the IDFC FIRST Bank mobile banking app and can check the details of their FD 24/7. IDFC FIRST Bank also offers a unique ‘Digital’ fixed deposit that you can open even without having an IDFC FIRST Bank savings account, at attractive interest rates.. This fixed deposit is easily accessible with IDFC FIRST Bank’s mobile banking app, an instant app for enhanced usability.

How to open a fixed deposit account online?

Here is the stepwise procedure to open a digital FD account with IDFC FIRST Bank and benefit from a competitive interest rate per annum:

1.  Visit the IDFC FIRST Bank website. Under “Deposits” click on “Fixed deposits”.

2. Click on "Deposit now” option. If website is opened on desktop, please scan the QR code.

3. Enter KYC details and verify with Aadhaar OTP

4. Select “Deposit amount” and “Tenure”

5. Click on “Create FD” to open your FD

FD laddering: An efficient way to make the most of your online FD investments

If you wish to increase your FD returns over time and also benefit from higher liquidity, you can choose to adopt the fixed deposit laddering strategy to do the same. This strategy requires the customer to spread their FD investment amount across multiple FDs with staggered maturity dates. For instance, if an investor has an FD investment amount of ₹5,00,000 at their disposal, they can choose to open five FDs worth ₹1,00,000 each with maturity dates that are one year apart from each other. This can help investors benefit from an increase in the interest rate the following year and can also offer higher liquidity.

Customers must decide on an investment objective and must decide on the right investment amount before starting an online FD investment. Doing so can help them avoid breaking the FD prematurely and interrupting the power of compounding at play.

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.