Flexi-Fixed Deposits: What are they?

Most people with a Bank Account have probably heard of a Fixed Deposit. It is the most popular investment instrument in India. But what is a Flexi-Fixed Deposit? If you are unsure about it, this guide offers a better understanding. Let us also explore its benefits.

About Flexi FDs

A Flexi-Fixed Deposit is a special deposit that banks offer. Such a scheme combines a Fixed Deposit along with a Demand Deposit. When you open such an FD, you get the opportunity to enjoy the high returns provided by an FD along with the liquidity offered by a Current and Savings Account.

Advantages of Flexi FDs

When you opt for a Flexi FD, you can look forward to the following benefits:

• Flexibility of investment amount

A Flexi FD lets you choose the amount you want to deposit. The deposit criteria may vary across banks. For example, some banks allow a deposit of Rs. 10,000 and save in multiples of Rs. 1,000. Hence, it is a good idea to check the details before opening this FD Account.

• Higher interest rates

Flexi FDs let you enjoy the advantage of higher interest rates. This can have a positive impact on the returns. Such an FD also usually offers better interest rates than an ordinary Savings Account.

• Flexible tenures

Banks usually let you choose an investment duration based on your needs. Consequently, you can stay invested for a shorter or longer duration based on your financial goals. However, the tenures for Flexi Deposit schemes might be different for various banks. Therefore, make sure you go through the rules.

• Allows easy withdrawals

Banks usually let you prematurely withdraw your Flexi Deposit. This flexibility lets you liquidate your investment during emergencies.

• Maximise returns

Some banks may let you liquidate your Flexi Deposit Account in multiples of Re. 1 while your balance continues earning interest at the initially approved rate. If you have multiple FDs linked to your Savings Account, the bank usually liquidates the last FD. This lets you enjoy maximum returns.

• Enjoy auto-renewals

If you invest in multiple investment schemes, it may be difficult to remember the maturity date for each scheme. This way, you may end up forgetting to renew an investment. However, when you opt for Flexi FDs, you need not go through the problems of the renewal process. Instead, banks usually offer an auto-renewal facility on Flexi FDs where they automatically renew the deposit when it matures. This benefit keeps you from remembering the maturity dates of your deposits.

Conclusion

Now that you know about a Flexi Deposit Account and its various advantages, you can check your bank's eligibility criteria and open this deposit with ease.