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Are Fixed Deposits an Outdated Concept?

By Finserv MARKETS - Aug 1,2019
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Are fixed deposits an outdated concept

Does it feel to you that the love affair between Indians and Fixed Deposits investments is now crossing the lines of infidelity? Does it feel like that FD investments, which at a certain point of time was synonymous with financial maturity, is now being considered as “one amongst other” numerous options available? So, let’s study if Fixed Deposits have actually become an outdated concept when it comes to long-term wealth creation?

What are Fixed Deposits?

Fixed Deposits are an investment instrument provided by banks and non-banking financial companies that give you an option to invest your money with your financier and promise a high return after the given maturity date. It is an easy and secure way to grow your savings. Once invested, the money starts accumulating interest as per the interest rate at which you locked in your deposit. It remains unaffected by the market fluctuations or further changes in interest rates. Fixed Deposits, thus, guarantee a secured return on your investment.

Fixed Deposits come with a lock-in period of 1 year to 10 years with a predefined annual interest rate. During this period an investor is advised not to withdraw the invested fund. However, if an investor decides to withdraw the amount before the maturity, he/she may have to pay a penalty.

Are Fixed Deposits an Old School Investment Instrument?

Most of the present-day investment schemes are explicitly designed to cater to the needs of the millennials — people who attained adulthood in the first decade of the 2000s and have grown in a digitally connected world. Today, a large number of younger millennials (between 24-39 years of age) are entering the job market and showing their huge interest in new-age investment options like Mutual Funds. Almost 41% of younger millennials are investing in equity or mutual funds to save taxes, generate income, and save money.

With so many new investment options cropping up, one has enough room to wonder if Fixed Deposits are an outdated concept. Some of the reasons for this concern might be that the returns generated from Fixed Deposits, while guaranteed, fall short of meeting the financial goals of many individuals. Secondly, those willing to start an FD must have a sum of at least Rs. 50,000 to park into this investment option. This has forced many new-age investors to seek other forms of investments.

Key Features of Fixed Deposits:

Today, 29% of younger millennials (between 24-39 years of age) are investing in FDs, and thus, Fixed Deposits are still able to command their reign in the investment marketplace and might just not be dying yet. Here are a few reasons, why!

  • Fixed Deposits help you earn a high return on your investment at the most competitive interest rates.
  • In addition to the high returns, FD is also a risk-free mode of investment. It guarantees a secured return on your deposit, as it remains unaffected by market fluctuations or further changes in interest rates.
  • If the tenure is selected thoughtfully, Fixed Deposits can help you achieve short-term as well as long-term life goals. The maturity amount can be used for purchasing a new car or going on an international vacation, funding your child’s higher education, or building a retirement corpus.

Who Should Invest in Fixed Deposits?

If you are looking forward to investing in a risk-free financial instrument and expecting guaranteed returns with high financial security, then FD is just the right tool for you. It is also a viable option if you want to park some of your funds at a safer place or want to build a contingency fund, also known as the rainy-day fund.

Where to Invest in Fixed Deposits?

Fixed Deposits on Finserv MARKETS will help you grow your savings with a high-interest rate and assured safety. The competitive rate of interest and tenure ranging from 12 – 23 months, 24 – 35 months, and 36 – 60 months lets you quickly multiply your savings.

This, besides, senior citizens also have the privilege to choose periodic payments out of their Fixed Deposits. This periodic payout will help manage their obligations post-retirement as they’ll have a regular and steady source of income. What’s more? Senior citizens get a higher interest rate as compared to their younger counterparts with an extra tax benefit on earnings from FDUnder Section 80TTA of the Income Tax Act, interest earned up to Rs. 10,000 from a savings bank account deposits are tax-exempted. Also, no Tax Deducted at Source (TDS) would be applicable if a senior citizen’s annual interest income from FD is Rs. 48,000. However, if the interest income exceeds Rs. 48,000 a TDS of 10% would be deducted by the bank.

At Finserv MARKETS, we understand the value of your money, and while the minimum amount for booking an FD is usually Rs. 50,000, we allow a minimum deposit of just Rs. 25,000 to park the investment. This also comes with an option of auto-renewal upon maturity so that you no longer have to go through the hassles of filling the same forms again and again.

Wrapping Up!

Fixed Deposits are not an age-old concept! Also, by choosing FD as your long-term companion, you can allow your funds to grow steadily over the years. So, whether you’re investing with the aim of building a corpus or are saving up to buy a home or a car, Fixed Deposits can serve as the ideal investment instrument. Additionally, it is one of the most secured and preferred investment avenues for people of all ages. Fixed Deposits are a perfect way of starting your investment journey. With Finserv MARKETS, the money you invest in your FD is never at risk. Make sure you have clarity on the rate of returns before actually making an investment.

So what are you waiting for? Book an FD Today!

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.


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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522