What are huge benefits of online bank FDs?

Several people have substantial amounts deposited in their savings accounts, earning only around three percent annual interest. If you also have a significant amount in your savings account, you can consider getting fixed deposit online, also known as FD. Various banks, including SBI, offer the facility of online FD through their mobile apps and websites. Through this process, you can earn more than double the interest on your amount. Almost all banks provide FD options ranging from 7 days to 10 years.

Now, let’s understand the process of creating an online FD. For example, you have an account with the State Bank of India.  To create an FD you can visit the bank’s website or use the Yono app and select the option for E-Fixed Deposit. After that, you will choose the type of FD and click on the process. Then, you need to fill in the principal amount and the maturity period. After reading the rules and terms associated with FD, you can submit the application. This will open your FD account. During internet banking, you will be able to see the FD account within her savings account. The process for online FD in other banks is generally the same.

If you have Rs 5 lakh in a savings account, you will earn a total of 13,637 rupees as interest at a rate of 2.7% annually. Currently, SBI is offering 6.80% interest on a one-year FD. If you invest that 5 lakh rupees in a one-year FD, you  will earn 34,877 rupees as interest. Your earnings through FD are more than two and a half times compared to keeping the money in savings account. If the FD amount is higher, the earnings will also increase.

Now, let’s talk about the benefits. If you opt for an online FD, you will have access to your money. You can track this investment anytime. If you have an FD and need money before maturity, you have to go to the bank branch and complete paperwork. On the other hand, with online FD, you can break it anytime. The money will be credited to your account immediately, ensuring liquidity. Some banks do not charge a penalty for breaking FD before maturity. If your bank provides this facility, it’s an added advantage. In such a case, whenever you have a little extra money in your account, you can opt for online FD.

These days, almost all banks offering the facility of overdraft (OD) on fixed deposits (FD). If you have a significant amount of online FD, consider availing the OD facility on it. This way, you won’t have to break the FD in case of an urgent need for funds. You can use the funds similar to a savings account, and the FD will continue to earn interest. The special thing is that you won’t need to visit the bank; your work can be done with just a click from the comfort of your home.

Personal finance expert Balwant Jain suggests that FD is a secure and popular option for investment. The availability of online options has increased the attractiveness of FD. If you are net-savvy and use the bank’s app, you can choose the option of online FD. This way, you can not only earn more but also maintain the liquidity of your money. Overall, there is no downside to getting an online FD, while there are many benefits.

Include FD in your portfolio for its strength. If you choose the online option for this investment, there will be higher earnings, and you can also free yourself from many worries. If you have a significant amount, invest it in segments so that, in case of a need for funds, you can break only one FD to fulfil your financial requirements. This way, you can avoid significant losses, and the remaining investments will continue to earn interest as before.