July 17, 2024

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What are the Documents Required for Investing Fixed Deposits?

Did you know that opening a Fixed Deposit (FD) is a quick and easy process? You must submit a few documents if you already have an online banking account. Submitting your KYC (Know Your Customer) documents to a bank or a Non-Banking Financial Company (NBFC) is the key to streamlining the application.

Did you know that opening a Fixed Deposit (FD) is a quick and easy process? You must submit a few documents if you already have an online banking account. Submitting your KYC (Know Your Customer) documents to a bank or a Non-Banking Financial Company (NBFC) is the key to streamlining the application.

 

Documents are essential as they are the deciding factor in processing your investment schemes. Typically for a fixed deposit, you only require a few additional documents if you already have a savings account with a bank or an NBFC. KYC documents are necessary for any bank or NBFC to verify your identity.

 

Documents Required for Opening Fixed Deposits

 

If you already have a savings account with one of these financial institutions, then you can use the same information to open a fixed deposit. The following list provides the documents required by different banks:

 

Identity Proof – You will need to submit identity proof such as your voter ID card or passport photo page to verify your identity.

 

Address Proof – You will also need an address proof such as a recent utility bill (electricity or water) at least 6 months old or a rent agreement/property tax receipt from within the last 6 months.

 

Eligibility to Open a Fixed Deposit:

 

The eligibility criteria to open an FD states that you need to be over 18 years of age and should be a citizen of India. The other entities that can open an FD in India include partnership firms, companies, unincorporated associations, Hindu Undivided Families (HUF), trusts, and foundations.

 

The following persons are not eligible to open fixed deposits:

 

  • Non-resident Indians (NRI)

 

  • Foreign citizens

 

  • Persons of Indian origin (PIO)

 

Benefits and Features of a Fixed Deposit:

 

You need to invest a lump sum of money for a fixed tenure to open an FD. You have the choice of receiving the interest earned periodically or once upon the deposit’s maturity. Here are some of the benefits and features of a fixed deposit you need to know:

 

Investment amount

 

You can invest any amount between Rs 50,000-Rs 1 lakh in an FD. The minimum interest rate offered on an FD is 6%. However, if you want to earn higher interest rates then you must invest more than Rs 1 lakh in an FD account. The maximum interest rate offered on an FD is 7%.

 

Tenure

 

The tenure of your FD depends on how long you want to keep your money invested with the bank. You can choose from 3 months, 6 months, 9 months, one year, two years and three years as your tenure period. The longer your tenure period is, the higher will be your interest rate as well. So if you want to maximize returns then go for a long-term investment plan like 2 years or 3 years.

 

Interest rates

 

This is one of the most important aspects that determine whether an instrument is good or not! Interest rates vary from bank to bank and from product to product as well! Rbl bank provides the highest interest rate for senior citizen

 

Repayment options:

 

 There are two ways in which you can repay your fixed deposit. You can get back your entire investment amount along with interest earned at the end of tenure or you can get back only part of your investment amount along with interest earned as per frequency decided by you;

 

Tax benefit: 

 

Interest on any FD is exempt from income tax under Section 80C of the Income Tax Act, 1961 if it is up to Rs 1 lakh.

 

You may also love to read about  -.  What is KYC and what does it have to do with fixed deposits?

 

Steps to Open a Fixed Deposit:

 

A new fixed deposit is a few clicks away if you already have a net banking account. If you don’t have access to the internet, you can always visit the bank/NBFC branch nearest to you.

 

Here are the steps to quickly start a new fixed deposit:

 

  1. Visit www.rblbank.in or download the RBL Bank mobile app, sign up and log in to your account.

 

  1. Click on the Fixed Deposit link under the Investments section of your dashboard and select your preferred term in the drop-down menu.

 

  1. Enter the amount and frequency of deposits in Rupees or as per NRE/FCNR terms offered by RBL Bank, which may vary from customer to customer depending on their location and residency status.

 

  1. Click on Submit button at bottom right corner of page (or press Enter key) to initiate the transaction