Fixed Deposit - Features, Types and Advantages

1
Fixed Deposit Features, Types and Advantages
(C) Axis Bank Ltd.
2
Whats a Fixed Deposit?

• A Fixed Deposit can be defined as an investment
  in which you deposit your money in a Bank for a
  fixed lock-in period.
• In return, the Bank gives you an interest at a
  specified rate and that interest is added to the
  original deposit while paying the accumulated
  amount to customer at the time of maturity.
• Banks also give you the option of periodic
  pay-outs in the form of monthly and quarterly
  interest payments if you intend to use that
  interest as a source of regular income.
• Minimum amount Rs. 10,000
• No maximum amount specified for deposit.

(C) Axis Bank Ltd.
3
Interest on Fixed Deposits

• Banks offer both fixed and floating rate of
  interest.
• Fixed rate of interest is unaffected by any
  change in market rates and stays constant during
  the deposit term.
• On the other hand, floating interest rates vary
  as per the market rates and keeps changing
  throughout the deposit term.
• For any fixed deposits below 6 months, Banks use
  simple interest while paying the sum at maturity.
  
• While for any deposits above 6 months in tenure,
  the interest is calculated using compound
  interest and it is compounded quarterly.

(C) Axis Bank Ltd.
4
Types of Fixed Deposits

• Bank Fixed Deposits
• Bank Fixed Deposits are made with Banks.
• Lower risk and comparatively lower interest
  returns
• Great liquidity options.
• Flexible lock-in periods.
• Corporate fixed deposits
• Corporate Fixed Deposits are made with companies
  who are looking for people to invest and fund
  their business.
• Higher risk and comparatively higher interest
  returns.
• Liquidity options are not great.
• Lock-in periods are not as flexible.

(C) Axis Bank Ltd.
5
Advantages of Investing in Fixed Deposits

• Advantages of Investing in Fixed Deposits
• Negligible risk
• Assured Returns
• Capital Appreciation
• Flexibility of parking additional capital for
  small terms
• Tax benefits for 5-year deposits

(C) Axis Bank Ltd.
6
THANK YOU
Visit www.itsallaboutmoney.com to know more.
(C) Axis Bank Ltd.