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Easy Guide On Flexi Fixed Deposits: Features, Benefits And More

Updated on: 28 Nov 2024

Have you ever heard of the term ‘flexi fixed deposit’? Fixed deposits have been popular amongst Indian investors because of their reliability and capital preservation. They give you the option to create a customised savings plan that helps you advance, slow and steady, towards your financial goals.

A flexi fixed deposit combines the benefits of a fixed deposit with a savings account. To learn more about it, continue reading.

What is Flexi Deposit?

Marrying the liquidity of a traditional savings account with the higher earnings of a fixed deposit, a flexi fixed deposit is an interesting option to consider. This hybrid product provides security and easy access to your funds.

With this type of FD, you can withdraw a part of your deposit, which is generally not allowed in FD investments where your funds are locked in for a predefined term. Here, your FD account is linked with your savings or current account. You can withdraw from it based on the terms of the financial institution. This facility comes at a cost as the interest rates you enjoy are lower than that of a regular FD. However, it does offer enhanced convenience.

It also allows you to choose a limit after which the funds in your account are transferred to the FD. When the account balance is lower than the limit you have set, the funds are transferred from the FD into the account. The terms of a flexi deposit may also differ as per the policies of the financial institution.

Features of Flexi Fixed Deposit

Here’s why you can choose this savings scheme:

Double Benefits

The attractive feature of a flexi deposit is you get the advantage of accessing funds via a bank account while earning interest that is higher than a traditional savings account. If you seek timely liquidity, this may be ideal for you.

Partially Withdrawable Funds

While you may not be able to access all of the funds of your FD, you can partially withdraw based on the allowed frequency and limit of the issuer.

Quarterly or Yearly Interest

Based on the financial institution’s policy, you can earn interest that is compounded at regular intervals. This is a great opportunity as you can save more and earn regular income.

Freedom of Choosing Principal and Tenure

You can decide on how much you want to invest in your FD and for how long. This helps you meet your financial goals on your terms.

Perks Like Loan Facility and Auto-Renewal

Just like a regular fixed deposit, a flexi deposit also allows you to pledge your FD to get a loan. You can also remain invested for the long-term by choosing the auto-renew facility.

Flexi Fixed Deposit Interest Rates

You can get assured returns with such an FD scheme, and most popular banks offer this option to grow your savings. Check the following table to compare the interest rates:

Name of Bank’s Scheme	Applied Interest Rate	Flexible Investment Tenure	Minimum Investment Amount
Axis Bank Auto Fixed Deposit	Up to 7.75% p.a.	6 months to 5 years	₹5,000
BOB Suvidha Flexible Fixed Deposit Scheme	Up to 7.65% p.a.	12 months to 5 years	₹5,000
e-SBI Flexi Deposit	Up to 7.50% p.a.	5 years to 7 years	₹5,000
DBS Bank Flexi Deposit	Up to 7.50% p.a.	374 days	₹10,000
RBL Bank Flexi Sure Fixed Deposit	Up to 8.85% p.a.	7 days to 10 years	₹5,000

Advantages and Disadvantages of Flexi Fixed Deposit

Keep the factors listed below in mind when deciding if this is the right investment for you:

Advantages of Flexi Fixed Deposit	Disadvantages of Flexi Fixed Deposit
Invest as much as you want Access higher liquidity Enjoy auto-renewal and loan facility	Lower interest rates than a regular FD Penalties apply for premature withdrawals May not be suited for long-term goals

Now that you know the basic facts, you can make the right decision based on your goals.

FAQs on Flexi Fixed Deposit

Can I withdraw money partially from a Flexi Fixed Deposit?

Yes, you can partially withdraw money from your fixed deposit with a flexi fixed deposit scheme.

What are the tax implications of investing in a Flexi Fixed Deposit?

Your yearly interest will be taxable as per your slab. TDS will also be deducted if your interest gains are about ₹40,000 or ₹50,000, based on whether you are a regular or senior citizen.