May 21, 2024

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Flexi Fixed Deposits: What Senior Citizens Should Know To Get The Best Investment Returns

Flexi Fixed Deposit

Flexi Fixed Deposit

As a senior citizen, you have spent most of your life working hard to build a secure future for you and your family. Now that you have retired, taking the necessary steps to ensure that your savings are working hard for you is essential. One of the significant ways to do that is by investing in a Fixed Deposit (FD). With the advent of technology, banks now offer Flexi Fixed Deposits that offer higher interest rates and more flexibility in terms of withdrawal and deposit. In addition, Flexi Fixed Deposit interest rates are typically higher than regular Fixed Deposits, making them an attractive option for those seeking better returns on their savings. 

In this article, we will look at Flexi Fixed Deposits and how senior citizens can benefit from them.

What are Flexi Fixed Deposits?

Flexi Fixed Deposits are a new fixed deposit scheme combining the benefits of both fixed and savings accounts. Under this scheme, the depositor can withdraw money from the fixed deposit account as required without breaking the entire deposit. You can also open FD online, meaning senior citizens do not need to visit the bank physically. Also, if you take some money out of an FD account before it matures, the amount you took out will still earn interest at the same rate as the original deposit until the maturity date.

Benefits of Flexi Fixed Deposits:

  1. Liquidity: One of the significant benefits of Flexi Fixed Deposits is liquidity. Unlike traditional fixed deposit schemes, the depositor can withdraw money from the fixed deposit account as and when required without breaking the entire deposit.
  2. Flexibility: Flexi Fixed Deposits offer flexibility to investors as they can choose the tenure of their deposit at their convenience. The depositor can also choose to renew the deposit on maturity or withdraw the entire amount without penalty.
  3. Higher Interest Rates: Flexi Fixed Deposit interest rates are higher than savings accounts. The interest rate for Flexi Fixed Deposits is usually higher than the regular fixed deposit schemes.
  4. Minimum Balance Requirement: Unlike savings accounts, Flexi Fixed Deposits do not have a minimum balance requirement. This means the depositor can withdraw the entire amount from the Fixed Deposit account without worrying about maintaining a minimum balance.

Important points to keep in mind before investing in Flexi Fixed Deposits

  1. Interest Rates: It is essential to compare the Flexi Fixed Deposit interest rates offered by various banks and financial institutions before investing in a Flexi Fixed Deposit. Flexi Fixed Deposits interest rate may vary from bank to bank.
  2. Tenure: The tenure of the deposit is an essential factor to consider while investing in Flexi Fixed Deposits. Senior citizens should choose a tenure that suits their financial goals and requirements.
  3. Tax Implications: The interest earned on Flexi Fixed Deposits is taxable as per the investor’s income tax slab. Senior citizens should keep this in mind while investing in Flexi Fixed Deposits.
  4. Online Banking: Many banks offer the option of opening FD online. Senior citizens should take advantage of this facility as it saves time and effort.
  5. Penalty Charges: Senior citizens should check the penalty charges levied by banks in case of premature withdrawal or breaking of the fixed deposit account. Choosing a bank with minimal or no penalty charges is essential.
  6. Auto-Renewal Option: Some banks offer an auto-renewal option on Flexi Fixed Deposits, meaning the deposit automatically gets renewed on maturity unless the investor withdraws the amount. Senior citizens should check if their bank offers this facility.
  7. Liquidity: Flexi Fixed Deposits offer liquidity as the investor can withdraw money from the fixed deposit account without breaking the entire deposit. However, senior citizens should remember that the amount withdrawn will stop earning the fixed deposit interest rates after withdrawal. They should plan their withdrawals and deposits accordingly to maximize their returns.

Flexi Fixed Deposits are a new fixed deposit scheme that offers investors liquidity, flexibility, and higher interest rates. Senior citizens looking for a safe and reliable investment option should consider investing in Flexi Fixed Deposits. However, compare the interest rates various banks offer before investing in a Flexi Fixed Deposit. In addition, senior citizens should also consider the tenure of the deposit, tax implications, online banking facilities, and penalty charges before investing. With careful planning and research, senior citizens can get the best investment returns from Flexi Fixed Deposits.