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.
Among the several banks offering flexi FDs, here is a list of the top few:
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.
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.
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.
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’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.
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.
Here is a list of the flexi fixed deposit rates offered by some of the top banks.
FD Interest Rates
Bank of Baroda
7 days to 1 year
15 days to 91 days
6 months to 5 years
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.
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.
Other FD Related Pages
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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.
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
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.
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.
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.
Yes, just like regular fixed deposits, TDS is applicable on the interest earnings of your flexi deposits.
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.
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.
Flexi FDs may have potential penalties for premature withdrawal, complex terms and conditions, limited flexibility, and potential impact on savings goals.