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What is a Flexi Fixed Deposit?

A flexi FD is a special type of fixed deposit plan that merges the compounding benefits of a fixed deposit with easy withdrawal facilities of a savings bank account. While regular FDs are secure saving tools, the predetermined tenor and saving amount can become a constraint for depositors.

 

Additionally, these plans lack liquidity benefits as no premature withdrawals can be made once money is deposited into the account. Alternatively, flexi fixed deposits allow customers to pick investment tenors and amounts that best suit their financial goals and permit withdrawals as and when needed.

 

Continue reading to know more about the flexi deposit meaning and banks offering the flexi deposit facility.

Banks Offering Flexi Fixed Deposit Plans

Among the several banks offering flexi FDs, here is a list of the top few:

  • Union Bank of India

Known as the ‘Union Savings Flexi Deposit Account’, this plan amalgamates the benefits of savings liquidity with the high-interest earnings of an FD.

With a tenor ranging from 46 days to 1 year and a minimum balance requirement of ₹50,000, this flexi deposit plan allows you to easily meet your financial goals.

  • Bank of Baroda

With Bank of Baroda’s ‘Suvidha Flexible Fixed Deposit Plan’, you can enjoy high flexi fixed deposit rates, along with the freedom to withdraw funds as and when needed.

Since such flexi fixed deposit accounts can be opened with a minimum deposit of ₹5,000, they are well-suited for young salary earners.

  • State Bank of India

SBI’s Flexi Fixed Deposit programs mimic recurring deposits where money can be deposited any time of the month, with no caps on the number of deposits each month. The minimum deposit amount is ₹5,000 for a given financial year, while the minimum lock-in period is 5 years.

  • ICICI Bank

Flexi FDs by ICICI Bank allow you to link your savings or current bank account with a flexi deposit plan. The minimum balance mandate for current account holders is ₹20,000, while for savings accounts it is capped at ₹10,000.

 

You also get to enjoy an auto reverse sweep-in facility with your ICICI flexi FD. In other words, money from the FD will automatically transfer to your account when withdrawal requests exceed the sums available in the account.

 

You can pick a favourable flexi fixed deposit tenor from the given 15-91-day time mandate.

  • Bank of India

Bank of India’s ‘Star Flexi Recurring Deposit Plan’ is an excellent tool to benefit from the high flexi FD interest rates without compromising on liquidity. This flexi deposit account can be opened on both individual and joint basis for flexible tenors ranging from 12 months to 10 years.

  • Axis Bank

To help investors meet their short-term goals, Axis Bank’s ‘Encash 24 Flexi Deposit’ plan comes with a minimum tenor of 6 months. However, the tenor for the plan can be extended to 5 years depending upon your financial goals.

 

You can withdraw from the money deposited in the flexi fixed deposit account via an ATM card or cheque to meet your liquidity concerns as and when the need arises.

Flexi FD Interest Rates

Here is a list of the flexi fixed deposit rates offered by some of the top banks.

Bank Name

Tenor

FD Interest Rates

SBI Bank

5 years

6.50% p.a.

Bank of Baroda

7 days to 1 year

3.00%-6.75% p.a.

ICICI Bank

15 days to 91 days

3.00%-4.75% p.a.

Axis Bank

6 months to 5 years

5.75%-7.00% p.a.

Features and Benefits of Flexi FD

High Returns

<p>Investing in a flexi fixed deposit can be a great way to grow your money since flexi fixed deposit interest rates tend to be higher than regular savings bank deposits. Thus, if you have a lump-sum corpus in your savings account, linking it to a flexi FD will ensure higher guaranteed returns.&nbsp;</p> <p>A&nbsp;<a href="https://www.bajajfinservmarkets.in/fixed-deposit/fd-calculator.html">fixed deposit interest calculator</a>&nbsp;can help determine the interest and the amount it will amass at maturity.</p>

Flexible Investment Tenors

When it comes to the investment tenor, you get to choose one that fits your fiscal goals. A flexi FD can help you meet short-term goals like funding a vacation or long-term financial goals like saving up for retirement.&nbsp;

Flexible Investment Amount

<p>With a flexi fixed deposit plan, you get free reign over not just the tenor but also the investment amount. In other words, depending on your fiscal goals and liquidity needs, you can decide how much you wish to park into this FD plan.</p> <p>However, it is essential to note that different banks may have different minimum deposit requirements.&nbsp;</p>

Liquidity Benefits

<p>Flexibility in terms of withdrawals is the greatest boon of a flexi fixed deposit plan. Thus, in case of an emergency, you do not have to dissolve the FD, instead you can withdraw funds from the same.</p> <p>Most banks permit withdrawals via ATM cards and cheques. However, such withdrawals are governed by the norms of the lender in question.&nbsp;</p>

Loanable Deposits

You can also avail loans against your flexi fixed deposit, with most lenders allowing you to borrow up to 95% of the deposited funds. While usually, the interest rates charged on such loans are lower than personal loan rates, you should review the lender’s policies carefully before availing this facility.&nbsp;

Hassle-Free Process

<p>Thanks to the digitised application process, booking a flexi bank FD is smooth and hassle-free. Moreover, since flexi FDs are linked to existing savings or current accounts, the bank is already in possession of your KYC documents.</p> <p>This means you get to skip the long KYC document verification stage when opening the account.&nbsp;</p>

Auto-Renewal and Nomination Facilities

<p>Most banks also offer an auto-renewal facility with their flexi fixed deposit plans to make renewals as easy and hassle-free as possible. Thus, you do not have to stress about remembering maturity dates or fear losing out on interest earnings.</p> <p>Additionally, some lenders also offer a nomination facility for such plans.</p>

Disadvantages of Flexi FD

While flexi FDs have their advantages, they also come with a few disadvantages:

  • Some flexi FDs may have minimum balance requirements that need to be maintained. 

  • While flexi FDs offer the advantage of liquidity, they may impose penalties for early withdrawal.

  • Flexi FDs can have complex terms and conditions compared to regular fixed deposits. 

  • While flexi FDs offer the flexibility to withdraw funds when needed, there may be restrictions on the availability of funds. 

  • Flexi FDs are more suitable for short-term liquidity needs rather than long-term investment goals. 

It is essential to evaluate these disadvantages along with the advantages and compare them with your financial goals and requirements before deciding on investing in a flexi FD.

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Difference between Flexi Fixed Deposits and Normal Fixed Deposits

The main difference between a flexi fixed deposit account and a normal FD stems from the liquidity benefits the former brings to the table. While both types of fixed deposit accounts allow you to earn high guaranteed returns, money locked into the latter cannot be withdrawn before the maturity date.

 

Even if you prematurely withdraw your FD, you will have to pay a penalty charge for the same. However, since flexi fixed deposit accounts are linked to savings or current accounts, you can withdraw sums of money in the event of an emergency.

 

Thus, given their easy liquidity benefits, flexi fixed deposits are more practical saving avenues that act as contingency funds in emergencies.

 

Additionally, when planning to book FDs with attractive interest rates, you can check out a few leading issuers on Bajaj Markets. Compare the rates and choose the one that best aligns with your financial goals.

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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FAQs on Flexi Fixed Deposits

Who can open a Flexi Fixed Deposit Account?

You must fulfil the eligibility criteria set by each bank to open a flexi fixed deposit, as requirements may vary across banks. Most banks provide options for both individual and joint flexi FDs, catering to the preferences of their customers.

What are the advantages of Flexi Fixed deposits?

A flexi fixed deposit plan allows you to withdraw funds from the account before the maturity date. Thus, the liquidity benefits of the plan come in handy during sudden emergencies

How can my Flexi FD be renewed?

You can either opt for the auto-renewal facility when opening the flexi fixed deposit account or renew it manually by visiting the bank branch on maturity.

How can money be withdrawn from my Flexi FD account?

Most banks require a prior intimation before withdrawing money from your flexi FD. However, some banks allow withdrawals via ATM cards and cheques without prior intimation.

How does a Flexi Fixed Deposit work?

A flexi FD works like a normal fixed deposit plan, except for allowing for easy premature withdrawals and more flexible investment terms. A flexi FD is linked to your savings or current bank account, from which you can withdraw funds in the event of a sudden crisis.

Is TDS applicable on flexi FDs?

Yes, just like regular fixed deposits, TDS is applicable on the interest earnings of your flexi deposits.

Is Flexi FD good?

Yes, a flexi FD can be a smart provision to avail, if you need the enhanced liquidity with your finances. This provision allows you to enjoy the benefits of both a savings and an FD account.

Which bank offers the best flexi deposit?

Issuers have their own terms and conditions when it comes to such offerings, and so the ideal approach would be to find the best one for you. Find an issuer that has suitable terms for your financial profile, and invest accordingly.

What are the disadvantages of Flexi FD?

Flexi FDs may have potential penalties for premature withdrawal, complex terms and conditions, limited flexibility, and potential impact on savings goals.

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