A Fixed Deposit can help investors earn interest on surplus money while keeping the investment for a defined period. The interest rate and maturity amount are known based on the selected deposit and its terms, making FDs suitable for planned financial goals.
Today, banks and NBFCs offer Fixed Deposits. Since each provider may offer different interest rates, tenures, payout options and deposit terms, comparing these details can help investors understand their options. The JioFinance service provides a convenient way to explore available Fixed Deposit options and review their key features in one place.
Why Consider a Fixed Deposit?
A Fixed Deposit lets you invest a lump sum for a set tenure at an applicable interest rate. Depending on the product, the interest may be paid at regular intervals or accumulated until maturity.
An FD can be considered for financial goals such as:
- Saving for a planned expense
- Building a corpus for a future goal
- Investing surplus funds for a fixed period
- Adding a fixed-return investment to a broader portfolio
- Earning interest on funds that are not immediately required
The selected tenure and interest payout option can influence the maturity value and cash flow from the deposit.
Before selecting an FD, consider how much you want to invest, when you may need the funds and whether you prefer regular interest income or accumulation until maturity.
Look at the Maturity Amount
The interest rate is an important part of an FD comparison, but the maturity amount gives a clearer picture of the investment's potential value.
The maturity amount can depend on:
- Principal invested
- Applicable interest rate
- Deposit tenure
- Interest calculation method
- Compounding frequency
- Payout structure
For instance, if two providers offer different rates, compare the maturity value for the same investment amount and tenure. This gives you a more useful basis for understanding the difference between the options.
Choose the Right Interest Payout Option
FDs may offer cumulative and non-cumulative options, depending on the product.
A cumulative FD generally accumulates the interest during the deposit period, with the interest and principal paid at maturity according to the applicable terms. This may suit investors who are building a corpus for a future financial requirement.
A non-cumulative FD pays interest at selected intervals, such as monthly, quarterly, half-yearly, or annually, depending on the product. This can suit investors who want regular interest income.
| FD option | How interest is received | Suitable for |
| Cumulative | Interest is accumulated until maturity | Future corpus building |
| Non-cumulative | Interest is paid at regular intervals | Regular income needs |
Available payout frequencies depend on the provider and deposit product.
Understand Bank and NBFC Fixed Deposits
Both banks and NBFCs can offer Fixed Deposits, but their deposit products may have different terms and features.
When comparing an FD from a bank with one from an NBFC, review the following:
| Factor | What to Check |
| Interest rate | Rate applicable to your chosen tenure |
| Tenure | Available deposit periods |
| Maturity value | Amount payable at maturity |
| Payout | Cumulative or periodic interest |
| Rating | Credit rating, where applicable |
| Deposit terms | Conditions specific to the product |
| Insurance or protection | Applicable coverage based on the type of institution |
For bank FDs, eligible deposits are covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to applicable conditions and limits. NBFC deposits follow the terms and regulatory framework applicable to the respective institution.
For NBFC FDs, investors can also review the credit rating assigned to the deposit programme, where available. A credit rating reflects a rating agency's assessment based on its methodology and available information.
How JioFinance Helps Explore FD Options
The JioFinance platform provides a digital way to explore available financial products, including Fixed Deposit options from participating providers.
Instead of reviewing each provider separately, investors can use the platform to explore available FD options and compare relevant details such as interest rates, tenures and other applicable terms.
The process can help investors:
- Review available FD options in one place
- Compare interest rates from different SFBs and NBFCs
- Check applicable deposit conditions
- Understand available interest payout options
- Review relevant information before booking
The rates, availability and terms displayed for an FD are determined by the respective provider and may change from time to time.
Steps to Compare FD Options
A few simple steps can make the comparison process more organised.
1. Decide the Investment Amount: Identify the amount available to invest after meeting your regular financial needs.
2. Choose Your Investment Period: Decide when you expect to need the funds. This can help you identify FD tenures that match your financial goal.
3. Compare Interest Rates: Check the applicable rate for your preferred tenure rather than comparing headline rates across different periods.
4. Check Maturity Values: Compare the potential maturity amount for similar investment amounts and tenures.
5. Review Interest Payouts: Choose between cumulative and periodic interest payouts based on your financial requirements.
6. Check the Product Terms: Review the tenure, withdrawal conditions, tax treatment, minimum deposit and other applicable terms before booking.
Conclusion
Fixed Deposits can offer a defined investment tenure and an applicable interest rate for investors looking to allocate surplus funds towards planned financial goals. Comparing options from banks and NBFCs requires attention to interest rates, maturity values, payout options, tenure, tax treatment and product terms. JioFinance provides a convenient digital route to explore available FD options and compare relevant details. Reviewing these factors can help investors select an FD that aligns with their investment horizon and financial requirements.
This article is paid content. It has been reviewed and edited by the Eastern Eye editorial team to meet our content standards.
