Fixed Deposit have been one of the most popular and traditional saving instruments in India for many years. In fact, it would not be wrong to say that fixed deposits were the preferred choice till ULIPs and mutual funds were introduced in our country. As banking has progressed, new products have been introduced which have new features. Each product comes with its own advantages and disadvantages. Mixing the features of some products becomes beneficial and thus, these rank higher in terms of others.
One such product is the flexi fixed deposits. These deposits combine the features of fixed deposits and saving or recurring accounts. This makes it more convenient and flexible as the account holders can get the liquidity which they get in a savings account and get the rates of interest of fixed deposits which are higher than a savings account.
Advantages of Flexi Fixed Deposit
There are many benefits of a flexi fixed deposit as these have many features which are better than a traditional fixed deposit and a savings account. Some of the advantages of holding a flexi fixed deposit are:
Better Rate of Interest
As compared to a savings account, a flexi fixed deposit earns a higher rate of interest. This gives the benefit of earning more money on the savings and investments.
Choice of Amount
A customer can decide the amount they would like to invest in these saving instruments. The deposit amount criteria vary from bank to bank, thus, one should check with their bankers.
One can choose a tenure that suits their needs and requirements. The tenure of a flexi fixed deposit vary from one bank to the other and thus, customers have a choice.
Though each bank has their own policy, but most banks in India which offer flexi fixed deposits to their customers allow premature withdrawal which gives them more flexibility. Many customers prefer to have the option of premature withdrawal as this ensures they get the liquidity in times of need.
Opening a flexi fixed deposit is simple as most banks have a transparent and easy process to open a flexi fixed deposit. The forms to fill are simple and it is not a time consuming process to open these in a bank.
Many banks offer the option to its customers to take a loan against their flexi fixed deposits. It is advisable to check with the bank as this the policy of each bank can vary on this.
No Stress to Renew
A facility of auto renewal is available on flexi fixed deposit. This gives a hassle-free condition to the customers as they do not need to remember dates for renewing as the bank automatically renews the deposit when it expires.
Flexi fixed deposit are a better tool than a fixed deposit. This is because the latter requires an amount to be deposited for a fixed time period and withdrawing it before that is not permissible. Whereas in case of the latter, the savings accounts are merged with the fixed deposits, giving the flexibility and convenience to withdraw money as per requirement. Most of the leading banks in the country, today, offer flexi fixed deposits to their customers.