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Are fixed deposits guaranteed by the government?

By Finserv MARKETS - Aug 9,2019
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Are fixed deposits guaranteed by the government

In India, fixed deposits are touted as the best investment plan owing to the guaranteed safety of returns. We have all heard our mothers swear by fixed deposits as a safe investment option, even comparable to gold.

Fixed deposits are term deposits that can be initiated at any bank or financial institution. These deposits generate interest at a specified rate for the predefined period of time. Fixed deposits are among the best investments since they ensure returns, as opposed to equity funds which promise high returns but also carry a high amount of risk. Alternatively, debt funds are an investment option which guarantees security, but the returns are very low.

Fixed deposits, available on Finserv MARKETS, offer interest rates as high as up to 8.95%, irrespective of market conditions. Senior citizens wishing to park their funds in a fixed deposit can avail interest rates which are 0.35% over and above existing rates.

There are several reasons why fixed deposits are considered the best investments. These include:

  • They are safe investment options since the rate of interest is already defined, as well as the time period of the investment. Since fixed deposits are not dependent on market forces, they are the best investments for persons looking to earn guaranteed returns.
  • A fixed deposit guarantees higher returns to an account holder, as compared to a normal savings account. It’s the best investment for those looking to park their extra funds in an account and earn interest off it.
  • At times of financial emergency, fixed deposits come extremely handy. Several banks and other institutions offer loans against fixed deposits. You can be granted a loan of up to 90% of the amount in your fixed deposit. The interest loan for these loans is also considerably lower, as compared to a personal loan.
  • Flexibility is the major reason why fixed deposits are considered as safe investments. You can choose to deposit any amount, for any length of time according to your requirements. In this way, you can plan for your finances well in advance. Additionally, you can choose the frequency of interest you want to receive, whether it is monthly, quarterly or yearly. Opting for a fixed deposit, available on Finserv MARKETS, allows you the freedom to choose an investment period that could range from 12 months to five years. This allows policyholders to plan their savings and align it with their financial goals better.
  • Another reason that fixed deposits are considered safe investment options is because they are compulsorily insured for up to Rs. 1 lakh. Since this is an RBI-mandated guideline, all banks and financial institutions offering fixed deposits are bound by it.

Besides these many benefits that make fixed deposits the best investment plan is the fact that fixed deposits have a deposit insurance element attached to them. This is coverage provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which is a subsidiary of the RBI. This insurance provision ensures that no matter what happens to the bank in cases of liquidation or amalgamation, the investor’s money will be safely returned to them.

The premiums payable for this insurance cover is borne by the banks, in which the fixed deposit is being created. If in case the bank fails and needs to be liquidated, DICGC becomes liable for providing up to a maximum of Rs. 1 lakh to each depositor for their principal and interest amount.

Fixed deposits, available on Finserv MARKETS, can be invested in very easily. These deposits not only offer very attractive interest rates up to 8.95% but also ensure complete flexibility for the investor to choose their tenure. Investors can choose a term between 12 months to five years, and thereby ensure that they are able to save while aligning with their financial goals and milestones.

Along with being a safe investment option, what makes fixed deposits available on Finserv MARKETS a great investment is an extreme convenience they offer in terms of application, submission of documents and keeping track of fixed deposits online. This allows investors to keep an eye on their deposits no matter where they are, and allows them to be free of the hassle of visiting branches or lengthy documentation processes. Additionally, the fixed deposit can be renewed online. In case you choose not to renew your fixed deposit, the maturity amount will be credited directly into your bank account.

Applying for a fixed deposit, available on Finserv MARKETS, is open for any citizen of India residing in the country, as well as HUFs, companies, clubs and associations, as well as family trusts. Just submit your KYC documents, and get started on investing in the best investment plan which guarantees the best returns, today.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522