What are the Various Types of Fixed Deposits?

byPriyanka JuyalLast Updated: December 26, 2022
Types of fixed deposits
Types of fixed deposits

Banks offer a range of fixed deposit options to their customers, allowing them to choose the one that best suits their needs and budget. The different types of fixed deposits vary in terms of their characteristics, benefits, limitations, and flexibility for premature or mature withdrawals. Customers can compare the options and choose the one that is best suited to their specific financial goals and circumstances.

In this blog, we will discuss the various types of fixed deposits and how to choose the right one.

What are the Types of Fixed Deposits?

Banks and financial institutions offer a range of fixed deposit options that allow customers to invest based on their needs and the amount they wish to invest. Each type of fixed deposit is unique and offers different benefits, limitations, and features, so it’s important for customers to consider their specific needs and goals when choosing the right option for them. By carefully evaluating the different options available, customers can choose the fixed deposit that offers the benefits and features that are most important to them.

The following are the different types of fixed deposits and their definitions:

Type of Fixed Deposits
Cumulative Fixed DepositInterest on a fixed deposit is only paid out at the time of maturity.Customers are not eligible for interest payments at regular intervals.Fixed deposits often offer a higher interest rate than regular savings accounts.They are suitable for people who do not need regular interest payments.The term of a fixed deposit can range from 1 year to 5 years.
Non-Cumulative Fixed DepositInterest is paid at regular intervalsThe tenure of FDs ranges from one to five yearsIn the case of a regular interest payout, one will be eligible for a lower amount at maturitySuitable for people who require a regular source of income in the form of interest
Bank DepositsOffered by banks to customers with saving accountsInterest rates are lower than those offered by non-banking financial institutions
Company DepositsOffered by NBFCs with a higher rate of interestFor companies with a good credit rating
Senior Citizen FDFor people over the age of 60When compared to other FDs, this one offers a higher rate of interestFlexible tenure
NRIs FDsNRIs, OCIs, and PIOs with NRO accounts are eligibleHigher rate of interest as compared to traditional saving accountsFixed tenurePayment mode- NEFT/RTGS from NRO bank account
Regular FDsRegular form of investmentUser can invest the amount for a particular time periodA fixed rate of interest is providedHigh-interest rate
Tax Saving FDsOffered by a major number of banksAnnual tax exemption of up to Rs. 1.5 lakhLock in period of 5 years, before that, the amount cannot be withdrawnOne time lump sum amount deposit
Flexi Fixed DepositThese FDs are linked to a savings accountCan be created with the initial deposit of choice and later be linked to the savings accountCustomers can limit the savings on savings account and the excess can be transferred to FD
Standard FDsFixed tenure Predetermined rate of interestTenure starts from 7 days to 10 yearsHigher interest rates than savings accounts

How to Find the Right Fixed Deposit?

When selecting a fixed deposit, it’s important to carefully consider the features, benefits, limitations, and flexibility of the different options available. Here are a few key things to keep in mind when choosing a fixed deposit:

  • The interest rate and whether it is fixed or variable
  • The term of the deposit and any penalties for early withdrawal
  • Any minimum deposit or balance requirements
  • The availability of regular interest payments
  • Any additional features or benefits, such as the option to automatically renew the deposit at maturity.

Read More: Short Term FD Vs Long Term FD


Is it possible to receive FD interest on a monthly basis?

It is possible to receive interest from a fixed deposit (FD) account on a monthly basis rather than at the end of the term. This can be a convenient way to receive regular income. Many banks and financial institutions offer this option, including Paytm Payments Bank, which offers a super liquid fixed deposit that can be redeemed at any time. The interest is paid out at the time of redemption, depending on the number of days the fixed deposit was maintained with the bank.

Is it possible to open a fixed deposit account online?

Yes, you can open a fixed deposit (FD) account online with many banks and financial institutions. This allows you to easily and conveniently open an FD account without having to visit a branch in person.

How do I open a Paytm Payments Bank fixed deposit account?

To create a fixed deposit with Paytm Payments Bank through the Paytm app, follow these steps:
  • Log in to the Paytm app on your device.
  • From the home screen, select “Paytm Bank” from the menu options.
  • On the Paytm Bank page, select the option to “Create a Fixed Deposit”.
  • In the next screen, enter the amount you would like to deposit and click “Create Paytm Payments Bank Fixed Deposit”.
  • Follow the on-screen instructions to complete the process.

Can I withdraw the FD amount before maturity?

Fixed deposits are typically long-term investments and withdrawing funds before the maturity date may result in a penalty. Some banks may offer the option to withdraw early with conditions, so it’s best to check with your bank for their policies.

You May Also Like