Why shouldn’t you close an online Fixed Deposit Before Maturity?

online Fixed Deposit

Fixed Deposit (FD) is a type of account which is provided by financial institutions for parking a specific amount for a fixed period. A fixed interest rate is applied on the principal amount and paid on a monthly, quarterly, half-yearly, or yearly basis.  Although there is no lock-in period for an FD, you might have to pay a penalty charge for premature withdrawals. The interest provided under Fixed Deposit is relatively high but can become comparatively low if the accrued sum is withdrawn before the maturity date. Financial providers also offer the facility to take loans against Fixed Deposit by keeping the receipts of fixed deposit as a form of collateral to eliminate the risks of premature withdrawals from an FD.

The merits of Fixed Deposit (FD) Account

  • The FD interest rates is higher as compared to all the other investment services offered in India.
  • Anybody who is above 18 years can opt for opening a Fixed Deposit account. There are no specific requirements associated with it.
  • Market fluctuations do not affect the Fixed Deposit investment returns.
  • Fixed Deposit provides a higher rate of interest when senior citizens are concerned.
  • Fixed Deposit is subject to Income Tax Exemption as per provisions of law.
  • Many offers and rewards are given along with FD especially with the online purchase.
  • The online Fixed Deposit management services allow the investor to keep track of the FD account without any hassles.
  • One customer can open multiple FDs with different tenors at the same time from the same financial provider.
  • On the maturity of the relevant tenor, the individual is entitled to get a renewal for the same tenor that they opened in the beginning.
  • The Fixed Deposit Scheme can be even opened by a minor. However, the account will be operated by a legal guardian or parents.
  • Account holders have the option of converting their individual accounts into a joint account.
  • Some Fixed Deposit allows for periodic interest pay-outs

Why should Fixed Deposits be Allowed to Mature?

There are various reasons why one should not make premature withdrawals with a fixed deposit, they are:

  • Fixed deposits, both online and offline, provide high rate of interest. Premature withdrawals will lead to getting less rate of interest.
  • There are various rewards and offers connected to online Fixed Deposits which may not be available if the account holder withdraws the money before maturity date.
  • Premature withdrawals in Fixed Deposit may adversely affect the retirement planning.
  • When Fixed Deposits are allowed to mature and are renewed thereon the account holder gets more interest rate on their respective FDs.
  • Under some Fixed Deposit schemes, premature withdrawal may result in penalty charges against the account holder.

How can Bajaj Finance Help You?

Bajaj Finance Fixed Deposit is your one stop to maximize your corpus. The features provided under FD with Bajaj Finance are:

  • High FD interest varying from 8.75% to 9.10%.
  • FD calculator aids in evaluating the returns and the interest rates in advance.
  • Bajaj Finance offers services throughout India via 200+ branches spread across 200 cities of India.
  • Registering for Fixed Deposit is easy with the online application minimal documentation procedure.
  • Option to choose between flexible tenors ranging from 12 months to 60 months.
  • Individuals above the age of 60 years can avail the perks of higher interest rates by investing for Senior Citizen Fixed Deposits.
  • Option to deposit a minimum sum of Rs 25,000 to open an FD account.
  • Availability to take loan against FD with the allowance to use 90% of the accumulated funds.
  • A special tenor is provided too under this scheme which ranges for 15 months and provides relatively more interest as compared to a 12 month FD scheme.
  • The account holder gets up to 0.25% and more on renewals of their Fixed Deposit scheme.
  • The company has been accredited with an MAAA (stable) by CRISIL and FAAA (stable) by ICRA.
  • The account holders have the option for doing payments via electronic (Real Time Gross Settlement {RTGS}) as well as physical modes (cheque facility).
  • The company provides a follow up via SMS and e-mail communication to their account holders regarding the FD scheme from the request date to the maturity date.