A large number of people in India prefer investment instruments that offer high returns. A visit to the financial institution is usually required for opening an investment account. We are all well aware of the increasing number of covid cases in India. With the lockdown, it is quite difficult to pay a visit to financial institutions.
But, has the lockdown stopped the individuals from getting their work done? The answer is ‘NO.’ Thanks to the advanced technology and impressive customer service, ate present, opening an investment account is just a matter of a couple of minutes.
Keep reading this article to gather more information about how you can invest in a beneficial investment instrument, such as an online fixed deposit.
The Procedure of Opening A Fixed Deposit Account Online
If you own a savings account in the financial institution where you want to apply for a fixed deposit online, you will need to log on to the official website or app of the institution. There you will find the ‘investment’ option. Once you find that, click on the option ‘fixed deposits’. The wordings may vary, but the process is nearly identical on most websites. After that, you will be required to fill up an online form with the details of the following things:
- The tenure of the deposit
- Interest payout (monthly, quarterly, half-yearly, or on maturity)
- Investment amount
- Permanent account number (PAN)
- Details of nominee
- Place of residence
- Occupation
The amount you wish to invest into your fixed deposit online gets debited from your savings account after fulfilling the process. You will receive a downloadable receipt after that. Make sure to check fixed deposit interest rates provided by the financial institution before investing.
You can also invest in financial institutions in which you do not hold a savings account. For example, PNB Housing does not offer the savings account facility, but investors throng to the company for investing in fixed deposits with interest rates of up to 6.95%.
For investing in such fixed deposits online, you will need to upload the following documents along with the previously mentioned documents online to complete the KYC process:
- One recent passport size photograph
- Address proof
- Permanent Account Number (PAN)
- Voter ID
- Aadhar Card
Details Regarding Tenure, Amount of Fixed Deposits, and Interest Rates
The tenure of a fixed deposit is flexible. Each financial institution has its own tenure rules, but you get quite a few options to choose from. The tenure of most institutions usually ranges from 7 days to 10 years. Some banks offer upto 20 years.
There is no maximum limit of the amount you can invest in a fixed deposit. The minimum amount differs from lender to lender. There are financial institutions where you can invest as little as 1,000. However, reputed financial institutions offering higher interest rates accept a minimum deposit of INR 10,000.
The rate of interest differs from lender to lender as well. So, it is very important to check fixed deposit interest rates before applying for a fixed deposit online. Some financial institutions (i.e. PNB Housing) offer higher a rate of interest for senior citizens, ranging from 0.25%-0.65%. In the case of joint fixed deposit accounts, the first account holder should be a senior citizen to avail additional rate of interest.
Details Regarding Tax Exemption
Financial institutions provide the facility to invest in five-year tax-saving fixed deposits online. You can claim a deduction of INR 1,50,000 for the amount invested to take tax benefit u/s 80C of the Income Tax Act, 1961. Financial institutions like PNB Housing provide TDS-free interest of up to INR 5,000 every financial year.
Conclusion
We hope this article encouraged you to invest in a fixed deposit online and provided you with the information you need to know before doing that. Investing money in fixed deposits is a smart and necessary financial move during this tough time.
