Procedure and Formalities for Opening a Fixed Deposit Account

The procedure to open a Fixed Deposit (FD) account was previously considered as a tedious procedure. With the emergence and development of online application and management procedure, this scenario has changed to a large extent. You will have to submit an application form if you meet the eligibility criteria for the same. Along with the application form, you would also require to submit a few necessary documents such as the KYC documents.

With the online application procedure, you can enjoy a few benefits like eliminating the need to stand in long queues, reducing the documentation, as well as put an end to the processing and documentation fee which is to be paid during the offline application. However, you also have the option for offline application from the nearest branch of your financial provider. Some factors to consider before choosing your financial provider are:

• High credibility with at least AA credit rating in case of Non-Banking Financial Provider

• High interest rates as compared to other providers

• Availability of online application as well as management facility

• Flexibility in choosing the FD tenor as well as the frequency of interest payout

• Decent financial health from at least past 3 years

• Option to take a loan against FD in case of emergencies with a low rate of interests

• High-interest rates for senior citizen applicants

• Flexibility in choosing the principal amount to be deposited when Opening Fixed Deposit Account

Although the procedure varies amongst the financial providers, below are a few common steps to be followed in order to open an FD account:

Step 1

Identify your savings that are idle and shall not be of use for a specific tenor.

Step 2

Find the right financial provider. For banks, it must be a nationalized bank and for NBFCs, prefer investing in credible providers such as Bajaj Finance with FAAA credit rating from CRISIL and MAAA credit rating from ICRA.

Step 3

Check the facilities provided under the Fixed Deposit scheme, Current Interest Rates on FD and choose the right one for you.

Step 4

Check your eligibility criteria from the website of the chosen financial provider and submit a duly filled application form. You can also avail the application form from the nearest branch of your financial provider.

Step 5

Deposit the principal amount online through RTGS, NEFT, or cheque. Also, use the online Fixed Deposit tools to calculate the returns that will be earned after the maturity period.

Step 6

You can save the application form for your future reference. Ideally, the customer care representative shall contact you for the further submission of necessary documents.

Step 7

You need to sign on the printed application form as well as attest your recent passport sized photograph to the same. Also, you need to keep the necessary document ready along with the form.

Step 8

A representative from your financial provider shall arrive at your place and collect the application form as well as the documents. The procedure is completed, and your FD application is confirmed as soon as the processing is completed.

Things to Consider Before Opening an FD Account

You need to consider a few things before finalizing the application for Fixed Deposit, they are:

1. Flexibility in Tenor

The tenor for an FD varies amongst the financial providers. For instance, with Bajaj Finance, you can deposit your money in an FD account from a tenor varying between 12 months and 60 months. You need to choose a financial provider that offers flexibility in tenor to meet your varying financial requirements.

2. Guaranteed Returns

You need to check the fund performance of the chosen financial provider from the past few years in order to analyze the probability of losing your invested money. Companies with high stability ranking such as Bajaj Finance ensures guaranteed returns of your invested money along with added benefits, if eligible.

3. Flexibility in Choosing the Frequency of Interest Payout

Almost all financial providers offer two types of FDs viz. Cumulative and Non-Cumulative. The non-cumulative FD allows you to choose the frequency of the interest payout from monthly, quarterly, half-yearly, and yearly basis. However, in order to receive the maximum from your FD investment, it is ideal to invest in cumulative FD and collect your FD interest rates along with the maturity amount.