JusPaisa - FAQ
What is a Fixed Deposit (FD)?
A Fixed Deposit (FD) is a financial instrument provided by banks and non-banking financial companies (NBFCs) where you deposit a lump sum for a fixed period at a predetermined interest rate.
How does an FD work?
When you invest in an FD, you deposit a sum of money for a specific tenure and earn interest at a fixed rate. At the end of the tenure, you receive the principal amount along with the accumulated interest.
What are the benefits of investing in an FD?
• Safety and low risk
• Guaranteed returns
• Flexible tenure options
• Higher interest rates than savings accounts
• Loan against FD facility
What is the minimum and maximum tenure for an FD?
The tenure for FDs ranges from 7 days to 10 years, depending on the bank or NBFC.
Can I withdraw my FD before maturity?
Yes, you can, but it may incur a penalty, and the interest rate may be lower than the original rate.
What are tax-saving FDs?
Tax-saving FDs have a lock-in period of 5 years and offer tax benefits under Section 80C of the Income Tax Act, 1961.
Are FDs taxable?
Yes, the interest earned on FDs is taxable. Banks deduct TDS if the interest income exceeds ₹40,000 per year (₹50,000 for senior citizens).
What are the interest rates on FDs?
Interest rates vary between banks and NBFCs and depend on the tenure. Typically, rates range from 3% to 7% per annum.
Can I take a loan against my FD?
Yes, most banks and NBFCs allow you to take a loan against your FD, usually up to 90% of the FD value.
How do I open an FD account?
You can open an FD account by visiting your bank branch, through internet banking, mobile banking apps, or digital channels like WhatsApp.
What documents are required to open an FD?
Generally, you need proof of identity, proof of address, passport-size photographs, and bank account details.
Can NRIs invest in FDs?
Yes, NRIs can invest in FDs through NRE or NRO accounts. NRE FDs are repatriable and tax-free, while NRO FDs are taxable.
What happens if I forget to renew my FD?
If no renewal instructions are given, the bank may either automatically renew the FD or transfer the maturity amount to your savings account.
Can I have multiple FDs?
Yes, you can have multiple FDs with the same or different banks.
What is the difference between cumulative and non-cumulative FDs?
In cumulative FDs, interest is compounded and paid at maturity. In non-cumulative FDs, interest is paid at regular intervals (monthly, quarterly, etc.).
Are there any charges for breaking an FD prematurely?
Yes, breaking an FD prematurely usually incurs a penalty, and the interest rate may be lower.
How is TDS deducted on FDs?
TDS is deducted at 10% if interest income exceeds ₹40,000 per year (₹50,000 for senior citizens). If no PAN is provided, TDS is deducted at 20%.
Can I renew my FD automatically?
Yes, most banks offer automatic renewal options for FDs.
How can I check the status of my FD?
You can check the status of your FD through internet banking, mobile banking apps, or by visiting your bank branch.
What is the difference between a bank FD and a company FD?
Bank FDs are offered by banks and are considered safer. Company FDs are offered by NBFCs or corporations and may offer higher interest rates but carry higher risk.
Can I open an FD in a minor’s name?
Yes, you can open an FD in a minor’s name, with the parent or guardian operating the account on behalf of the minor.
What happens to my FD if the bank fails?
Deposits in banks are insured up to ₹5 lakhs by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Can I transfer my FD from one bank to another?
No, FDs cannot be transferred from one bank to another. You need to close the existing FD and open a new one in the desired bank.
What are the types of FDs available?
Types of FDs include regular FD, tax-saving FD, senior citizen FD, NRE/NRO FD, and flexi FD.
Can I change the tenure of my FD after opening it?
No, the tenure of an FD cannot be changed once it is opened. You would need to close the FD and open a new one with the desired tenure.
What is the process for premature withdrawal of an FD?
To withdraw an FD prematurely, you need to submit a request to your bank. The bank will process the request, apply any penalties, and credit the remaining amount to your account.
Are senior citizens eligible for higher interest rates on FDs?
Yes, senior citizens typically receive higher interest rates on FDs, usually 0.25% to 0.50% higher than regular rates.
Can I nominate someone for my FD?
Yes, you can nominate one or more individuals to receive the FD amount in case of your demise.
What is a Flexi FD?
A Flexi FD is a combination of a savings account and a fixed deposit. It provides liquidity and earns higher interest rates, with the flexibility to withdraw funds when needed.