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Does the Government guarantee your fixed deposit?

By Finserv MARKETS - Aug 26,2019
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Does the Government guarantee your fixed deposit

Fixed deposits are one of the most popular ways of earning guaranteed returns on your savings. They are risk-free instruments since they are not market-driven and the account holder receives the assured sum with interest at the time of maturity. Due to its liquid nature, it can be converted into cash at any time and can be withdrawn when needed.

How secure are FD accounts

Unlike other forms of investment that are market-driven, FD accounts are more like a conservative approach to investing. The crux of such an investment lies in the security which provides — the security that the money is safe and that the returns are assured after a period of time.

 

Does the Government guarantee your fixed deposit?
 

This feature has made fixed deposit accounts a popular investment choice for numerous individuals.

Does the Government guarantee your FDs

All bank deposits are secured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC). The DICGC ensures that the bank deposits up to Rs 1 lac if there should be an occurrence of a bank failure. Any sum over Rs One lakh is liable to default risk. The real recuperation could differ from case to case.

The position is the same for the nationalized banks. A similar plan of the DICGC likewise secures the nationalized banks. However, the Government has a controlling stake in these banks. This gives an extra solace to investors if the bank fails. The Government is expected to ensure the interests of the investors. Most likely because of this, none of the nationalized banks have confronted this circumstance i.e., of being not able to reimburse its deposits, and the clear discernment is that the deposits are safeguarded in the banks.

Even if there should be an occurrence of a bank failure, these have been converged with more grounded banks at the case of the Reserve Bank of India (RBI) and the Government. If we look at examples in this case, Global Trust Bank(GTB) which is a private part bank, was converged with Oriental Bank of Commerce(OBC), a nationalized bank. ICICI Bank acquired some private division banks like the Bank of Rajasthan. The significant point to note is that the contributors have not lost money in any of these cases. Contributors would have lost money if this happens with cooperative banks. The merger procedure is somewhat more convoluted unless the acquiring bank is also Cooperative bank.

The financial framework in India is controlled, and there are incredibly high standards for newcomers in the industry. As of late, every branch required the endorsement of RBI in terms of branch authorizing a policy. This has made the acquisition process of a bank quite appealing, as the acquirer gains admittance to the branch and user base. While there could be some issues with merging the legacy and culture, it is still viewed as beneficial.

In perspective on the abovementioned, fixed deposits are commonly viewed as a safe investment in India.

Fixed deposits on Finserv MARKETS come with a stable ICRA MAAA and CRISIL FAAA rating, which means that your deposits are quite safe. With investment periods ranging from 12 months to 5 years, your money, indeed, is in safe hands. The results are guaranteed irrespective of market fluctuations.

After the tenor is completed, you have the option to either renew or withdraw your FD. Renewal can be done online, but if you don’t plan to renew your FD account, the maturity amount will be directly credited into your bank account.

 

Conclusion

Fixed deposit accounts are safe and sound investment option. FDs on Finserv MARKETS let you take control of your investments by clubbing attractive returns with stability. Besides, you also get to choose from a range of tenures that suit your needs.

The process to apply for an FD online is quite easy. All you have to do is fill in your basic details and choose a fixed deposit plan, upload the required documents, and deposit the money in your newly-opened FD to activate it. This done, you can track your FD returns anytime and anywhere.

FDs on Finserv MARKETS offer best in class interest rates in India — with interest rates starting from 8 percent, going as high as 8.95 percent for senior citizens, the benefits for fixed deposit accounts are even greater as they get access to a higher interest rate. Here, fixed deposits come with a stable ICRA MAAA and CRISIL FAAA rating, which means that your investment is quite safe. Besides, you have the option to track your investments anytime, anywhere.

 

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