- By Shivani
- 12th September, 2024
- Finance
Digital Fixed Deposits (FDs) are a popular investment option in India, offering a range of benefits to investors. Let’s get into the advantages of Digital FDs and how they can help you grow your savings in the upcoming years Its advantages process and return.
What is a Digital FD?
A Digital FD is a type of fixed deposit that can be opened and managed entirely online. It is a digital version of the traditional fixed deposit, which requires a physical visit to a bank branch. Digital FDs are offered by several banks in India, including Axis Bank, HDFC Bank, and SBI.
Advantages of Digital FD
Convenience: Digital FDs can be opened and managed from the comfort of your own home. You can access your account details, make deposits, and withdraw funds at any time using your mobile phone or computer.
- Flexibility: Digital FDs offer a range of tenure options, from 7 days to 10 years, allowing you to choose the term that best suits your financial goals.
- High Interest Rates: Digital FDs offer competitive interest rates, which are higher than those offered by traditional savings accounts. The interest rates vary depending on the tenure and type of FD.
- Guaranteed Returns: Digital FDs offer guaranteed returns, which means that you can expect a fixed return on your investment.
- Liquidity: Digital FDs offer liquidity, which means that you can withdraw your funds at any time, subject to certain conditions.
- No Minimum Balance Requirement: Unlike traditional savings accounts, Digital FDs do not require a minimum balance to be maintained.
- No Penalties for Premature Withdrawal: Digital FDs do not charge penalties for premature withdrawal, making it easier to access your funds when needed.
- Auto-Renewal Option: Digital FDs offer an auto-renewal option, which allows you to reinvest your returns in the FD, ensuring that your investment continues to grow.
- Online FD Calculator: Digital FDs offer an online FD calculator, which helps you calculate your returns and plan your investment.
- Secure: Digital FDs are secure, as they are backed by the bank’s guarantee and are protected by robust security measures.
How to Open a Digital FD
Opening a Digital FD is a simple process that can be completed online. Here are the steps to follow:
- Visit the Bank’s Website: Visit the website of the bank you want to open a Digital FD with.
- Fill out the Application Form: Fill out the application form with your personal and financial details.
- Upload Required Documents: Upload the required documents, such as your Aadhaar card, PAN card, and mobile number linked to Aadhaar.
- Complete Video KYC: Complete the video KYC process, which involves a video verification of your identity.
- Make the Deposit: Make the deposit using your preferred payment method.
- Receive the FD Receipt: Receive the FD receipt and start earning interest on your investment.
How the video KYC process works for Digital Fixed Deposits (FDs):
Initiate the Video KYC Process:
The customer can initiate the video KYC process by visiting the bank’s website or following a link provided by the bank. This process can be completed from anywhere, as it is a contactless and digital procedure.
Verification of Identity:
During the video call, the bank official will verify the customer’s identity by asking them to provide their PAN card and Aadhaar card. The bank official will capture a live photo of the customer and verify the details on the PAN card using optical character recognition (OCR) technology.
Personal Details Collection:
The customer will be asked to provide their personal details, such as name, address, and contact information, to set up the Digital FD account.
Video KYC Completion:
The bank official will conduct the video KYC process, which involves a face-to-face interaction with the customer to verify their identity and address. The customer will need to enable video and microphone access on their device to complete the video KYC.
Successful KYC Verification:
If the video KYC process is successful, the customer will be able to proceed with opening the Digital FD account.
Account Funding:
The customer can then fund the Digital FD account using their preferred payment method, such as net banking, debit card, or UPI.
The key benefits of the video KYC process for Digital FDs include:
- Convenience: Customers can complete the KYC process from the comfort of their homes, without the need to visit a bank branch.
- Speed: The video KYC process is typically completed within a few minutes, allowing for faster account opening.
- Security: The video KYC process uses advanced technologies, such as facial recognition and OCR, to ensure the customer’s identity is verified securely.
- Accessibility: The video KYC process is available 24/7, making it easier for customers to open Digital FD accounts at their convenience.
Overall, the video KYC process streamlines the account opening process for Digital FDs, providing customers with a seamless and efficient experience and comfort to open an account as needed.
HDFC Bank’s Digital FD is a type of fixed deposit that can be opened and managed entirely online. Here are some key features and benefits:
- Interest Rates: HDFC Bank’s Digital FD offers interest rates ranging from 3% to 7.15% per annum for the general public and 3.50% to 7.75% per annum for senior citizens.
- Tenure: The tenure for HDFC Bank’s Digital FD ranges from 7 days to 10 years.
- Minimum Deposit: The minimum deposit for HDFC Bank’s Digital FD is ₹5,000.
- Maximum Deposit: There is no upper limit on the maximum deposit for HDFC Bank’s Digital FD.
- Flexi Tenure: HDFC Bank’s Digital FD offers a flexi tenure option, which allows customers to choose their tenure and interest rates separately.
- Monthly/Quarterly Interest Payout: HDFC Bank’s Digital FD offers a monthly or quarterly interest payout option.
- Compound Interest: HDFC Bank’s Digital FD offers compound interest on reinvestment deposits.
- Tax Benefits: HDFC Bank’s Digital FD does not offer any tax benefits. However, if you have invested in HDFC Bank’s Tax Saver Fixed Deposit, you can claim a deduction of up to ₹1,50,000 under Section 80C of the Income Tax Act and save on taxes.
Basic doubts:
Digital FD without bank account:
Yes, you can open a Digital FD without a bank account. For example, Axis Bank allows you to open a Digital FD without needing to open a Savings Account in the same bank.
Digital Fixed Deposit Axis Bank:
Axis Bank offers a Digital Fixed Deposit that can be opened online. It offers competitive interest rates, premature withdrawals, and a flexible tenure ranging from 7 days to 10 years.
Can I open FD without bank account in SBI:
Yes, you can open an FD without a bank account in SBI. SBI allows you to open an FD online through their online portal.
Axis Bank FD Calculator:
Axis Bank offers an FD calculator that helps you determine the right terms and conditions of your deposit. You can input the FD interest, cumulative or non-cumulative account, principal and interest rate to arrive at the right calculations.
Does FD count as minimum balance in Axis Bank:
No, an FD does not count as minimum balance in Axis Bank. You can open an FD with a minimum deposit of ₹5,000 and enjoy the benefits without maintaining a minimum balance.
Axis Bank FD Rates:
Axis Bank offers competitive FD rates ranging from 3.50% to 7.90% per annum for general public and 4.00% to 8.40% per annum for senior citizens.
Axis Bank FD Benefits:
Axis Bank’s Digital FD offers several benefits, including competitive interest rates, premature withdrawals, flexible tenure, and a completely digital experience.
Conclusion
Digital FDs are preferred over the traditional ones because they offer a range of benefits to investors, including convenience as time-saving, flexibility, high interest rates comparatively, guaranteed returns, liquidity, and security. They are a popular investment option in India and can be opened and managed entirely online.
