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Key Highlights
- A Flexi fixed deposit combines the features of a savings account and a fixed deposit.
- A Flexi FD is linked with your savings account, without impacting the amount invested.
- A Flexi fixed deposit typically transfers the surplus funds above a specific threshold from your savings account to a fixed deposit.
Fixed deposits continue to be a popular choice among many, thanks to the minimum risk involved and fixed returns. With the evolving banking landscape, fixed deposits have also evolved to offer more flexibility and additional features, such a Flexi Fixed Deposit or Flexi FD. This product combines the features of a fixed deposit and a savings account.Curious to learn more about Flexi FD? Read on as we discuss its features and how it is different from regular fixed deposits.
What is a Flexi Fixed Deposit?
A Flexi FD typically facilitates the transfer of surplus funds above a specific threshold from your savings account to a fixed deposit.This leads to an optimum allocation of your funds between savings and fixed deposit accounts. What's more, you get to enjoy interest on the surplus amount invested, which is higher than the savings interest rate.
Key Features and Benefits of a Flexi Fixed Deposit
You can expect the best of both i.e. a savings account and a fixed deposit in a Flexi fixed deposit. Here are some of its key features and benefits:
Ease of Account Opening
The process of opening a Flexi FD is quite simple. Just fill out the relevant form and share basic details like investment amount and duration, along with your contact details.
More Interest Earnings
Interest rates on fixed deposits are higher than the interest on savings accounts. Thus, you earn comparatively more interest on the invested amount, while enjoying the convenience of a savings account.
Choose the Investment Amount
In a Flexi FD, you need to pay a lump sum amount. You have the flexibility to choose this amount. However, every bank has different norms; so, you must check with your bank for more details.
Determine the Investment Duration
You have the flexibility to determine the investment duration, based on your financial goals.
Auto Renewal
It usually gets difficult to track multiple investments and their renewal dates. However, a Flexi fixed deposit typically comes with an auto-renewal facility and frees you from the hassle of remembering individual due dates.
Easy Loans
You can use your Flexi FD to get easy loans during emergencies. A quick availability of funds without liquidating your investments provides financial comfort when you need it the most.
How is a Flexi Fixed Deposit Different from a Regular Fixed Deposit?
A Flexi FD offers a unique set of features which sets it apart from the regular FD. The key differences are as below:
| Particulars | Flexi Fixed Deposit | Regular Fixed Deposit |
| Features | Offers combined features of a fixed deposit and savings account. | Offers features only of a fixed deposit. |
| Structure | It is a fixed deposit linked with a savings account. | It is a standalone fixed deposit. |
| Withdrawal | Facilitates withdrawal from the linked savings account, keeping your fixed deposit intact. | It allows liquidating before the due date, subject to penal charges. |
| Interest Rates | Typically, lower than a regular fixed deposit. | Normally more than Flexi Fixed Deposit. |
Open a Flexi Fixed Deposit to Reap Maximum Benefits from Your Savings
You may open a Flexi FD to enjoy the stability of a fixed deposit and the convenience of a savings account. However, if you are searching for an avenue to create a secured corpus for your financial goals without the need for a traditional bank account, consider a standalone fixed deposit.Interestingly, you can open a fixed deposit with NBFCs like Aditya Birla Capital for a specified period to earn guaranteed returns. Also Read: What is a Fixed Deposit (FD)? Meaning, Definition & Benefits
FAQS - FREQUENTLY ASKED QUESTIONS
What is a Flexi Fixed Deposit?
A Flexi Fixed Deposit is a banking product combining the features of a savings account and a fixed deposit.
How does a Flexi FD operate?
A Flexi FD typically transfers the surplus funds above a specific threshold from your savings account to a fixed deposit. This way you enjoy an optimum allocation of your funds between savings and fixed deposit accounts.
What is the process for opening Flexi FDs?
The process to open Flexi FDs is simple. Just fill out the relevant form with basic details like investment amount and duration along with your contact details.
How is Flexi FD different from a regular FD?
Flexi FDs and regular FDs differ in their basic features, account structure, withdrawal facilities, interest rates, etc.
What is the difference between both FDs in terms of their basic features?
While Flexi FDs offer combined features of a fixed deposit and savings account, a regular FD offers features of a fixed deposit only.
How is the account structure in Flexi Fixed Deposits different from regular FDs?
A Flexi FD is linked to a savings account. On the other hand, a regular FD is a standalone FD.
What is the difference in interest between these two fixed deposits?
Usually, the interest rate is lower on Flexi fixed deposits than on regular deposits.
Could you talk about the differences in light of withdrawals?
In the case of Flexi Fixed Deposits, you can withdraw money from the linked savings account without affecting your fixed deposit investment. In the case of regular deposits, since you liquidate your FD before maturity, it attracts a penalty.
Can I open a fixed deposit with a traditional savings account?
If you do not wish to open a traditional savings account, you can consider a regular fixed deposit with an NBFC or bank.
What are the benefits of a fixed deposit?
A fixed deposit helps create a secured corpus for your specific financial goals.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
