A fixed deposit is one of the most popular deposit options. In an FD, funds are locked in till maturity in exchange for a fixed rate of interest. Earlier, fixed deposits could be opened by visiting the bank branch. But now, with internet banking, you can open your FD completely online.
But when opening a fixed deposit in the bank branch is so easy and convenient, why should you opt for opening the fixed deposit online?
Here are 5 advantages of opening a fixed deposit online:
Convenience:
The biggest advantage of opening your fixed deposit online is the convenience it offers. Opening the fixed deposit online through internet banking or mobile banking is extremely convenient. You can do this anytime when you have a stable internet connection. You don’t need to wait for banking hours to go to the branch and fill up a form. It can be done within a few minutes online.
Interest rate comparison:
If you decide to opt for opening the fixed deposit online, you can compare the interest rate among different banks and then decide where to open the fixed deposit. Banks allow customers who don’t hold accounts with them to also open FDs with them.
FD calculator:
You can calculate the interest and the maturity value of the FD in advance before opening the FD by using an FD calculator that is available on the bank’s website. This will help you decide the tenure and interest payment option that will give you the highest maturity value.
There are different interest payment options available; monthly interest payment, quarterly interest payment and reinvestment of interest. Banks calculate interest quarterly, even though they give a monthly interest payment option.
The reinvestment of interest option will give you the highest maturity value because the calculated interest is reinvested and it earns interest for the next quarter. You can find all of this out online before opening your FD. This can help you plan your investments better.
Submit tax documents:
If your FD interest across all branches does not exceed Rs. 10,000 for a financial year, the bank will not deduct tax on the interest. However, if your total income is not exceeding the no tax limit, then you can submit Form 15G/15H online so that the bank does not deduct tax on your interest income. Submitting this form online is extremely simple.
Sweep in facility:
One way to earn additional income from your savings account is by opening a sweep in facility. In this facility, any amount above a set limit is automatically converted into an FD. This way, the excess amount earns interest at a higher rate as compared to a savings account. Whenever there is a need for additional funds, the FD is broken and funds are available for use.