Table of Contents
Managing Fixed Deposit accounts across different banks can become difficult when each institution has a separate application, website and process. Comparing interest rates may require checking multiple sources, calculating maturity amounts and completing separate forms.
A single platform can make this process easier by bringing different Fixed Deposit account options together. JioFinance allows users to compare deposits from participating banks and NBFCs, select a suitable option and complete the booking process online.
Why Compare FD Options Before Investing?
FD interest rates vary across financial institutions and tenures. A bank may offer a different rate for a two-year deposit than an NBFC or small finance bank. Senior citizens may also receive additional interest, depending on the institution’s terms.
Comparing options can help investors assess the rate, tenure, maturity value and other conditions before committing their savings.
For example, JioFinance currently lists Fixed Deposit account options with rates of up to 8.5% p.a., subject to the lending institution, tenure and applicable terms. Available tenures can start from 7 days and extend to several years.
A difference in interest rates can have a meaningful effect on the maturity amount, particularly when a larger sum is invested for a longer period. Therefore, comparing options based on the intended investment period can help investors make a more informed decision.
How JioFinance Simplifies FD Booking
Opening an FD with different institutions can involve separate applications and verification processes. Jio Finance brings participating institutions together, allowing eligible users to explore their FD products through one platform.
The process includes:
- Compare options: Review interest rates, tenures, maturity values and other applicable terms from participating institutions.
- Complete e-KYC: Provide the required identity details, including PAN and Aadhaar-linked mobile information, as applicable.
- Invest: Transfer the selected deposit amount through the available digital payment process.
- Track deposits: Keep track of FD details and maturity information through the platform.
The available FD products may include offerings from institutions such as Unity Small Finance Bank, Suryoday Small Finance Bank, Bajaj Finance, Shriram Finance and Mahindra Finance.
The selected bank or NBFC holds the deposit. JioFinance facilitates the digital journey but does not hold the deposited funds.
Choose an FD Based on Your Financial Needs
FDs offer different payout structures, allowing investors to select an option based on their financial requirements.
Cumulative FD
In a cumulative FD, the interest is accumulated during the tenure and paid along with the principal at maturity. This may suit investors who do not need regular income and want to build a lump sum for a future requirement.
Non-Cumulative FD
A non-cumulative FD provides interest payouts at selected intervals, such as monthly, quarterly, half-yearly or annually. This can be useful for investors who require periodic income from their deposits.
Tax-Saver FD
Tax-saving FDs have a five-year lock-in period. Eligible investments can qualify for a deduction of up to INR 1.5 Lakh under Section 123, with eligible investments listed in Schedule XV. The deduction is subject to the applicable tax regime and conditions.
Some financial institutions may also provide additional interest rates for senior citizens or special deposit schemes for eligible customer groups.
Tax and Eligibility Considerations
Before booking an FD, investors should check the eligibility requirements and tax implications.
For eligible products available through JioFinance, applicants generally need to meet the age and KYC requirements specified by the respective institution. Minimum deposit amounts also vary between providers.
FD interest is taxable according to the applicable income-tax rules. TDS may apply when interest crosses the prescribed threshold. Under the current rules, the threshold is INR 50,000 for senior citizens and INR 40,000 for other eligible depositors for interest on bank deposits, subject to applicable provisions.
The interest rate applicable to an FD is generally fixed when the deposit is booked for the selected tenure. This means changes in market rates after booking do not alter the contracted rate for that deposit.
However, withdrawing the FD before maturity may result in reduced interest or applicable premature withdrawal charges, depending on the issuer’s terms.
Conclusion
Comparing FD options does not have to involve managing multiple banking applications or visiting several branches. JioFinance brings FD products from participating banks and NBFCs together, allowing users to compare rates, tenures, payout options and other terms in one place.
Before opening a Fixed Deposit account, consider the interest rate, maturity value, tenure, payout structure, premature withdrawal conditions and tax treatment. This approach can help you select an FD that suits your financial goals while making the booking process more convenient.