Fixed Deposit for Students
Non-Banking Financial Companies (NBFCs) and banks offer Fixed Deposit (FD) schemes at attractive tenors. The interest rates offered on FDs are usually higher than traditional savings accounts.
Individuals across various age groups can open an FD account. Most individuals tend to invest in an FD as it is one of the safest investment options. Therefore, students can also invest in an FD account and save money in the long run.
Benefits of an FD account for Students
Some of the main benefits for students to invest in an FD account are mentioned below:
- Loans can be availed against the amount available in the FD account.
- The minimum deposit that must be made is low.
- Several banks and NBFCs provide the option to open an FD account online.
- The tenure of the FD account may range from 7 days to 10 years. Therefore, students can choose a tenure that meets their requirements.
- The rate of interest that is offered for investments in an FD account is generally higher than a savings account. Therefore, students can save more money over the long run.
Documents Required
The documents that must be submitted to open an FD account are mentioned below:
- Passport-sized photograph.
- Application form. Students can visit the bank branch to get the application form or download the form on the official website of the bank or NBFC.
- Proof of address such as utility bills, bank statement, Aadhaar Card, etc.
- Proof of age such as Ration Card, driving license, Aadhaar Card, Voter's ID, Permanent Account Number (PAN) Card, etc.
Process to Open an FD Account Online
Almost all NBFCs and banks allow students to open an FD account online. The process to open an FD account with HDFC Bank is given below:
- Visit https://www.hdfcbank.com/personal/save/deposits/fixed-deposit.
- Click on 'Apply Online'.
- Enter the mobile number that is linked to your HDFC Bank account.
- Enter the date of birth or PAN.
- An OTP will be sent to the mobile number. Enter the OTP to complete the validation process.
- Choose the type of FD account.
- Next, the deposit details must be entered.
- The application must be reconfirmed and the authentication process must be completed to open an FD account.
In case you wish to open an FD account with HDFC Bank, you must have a savings account with the bank.
Apart from the benefits mentioned above, premature withdrawal facility is also provided in case students require funds in an emergency. Investing in an FD account is safe and helps in saving money over the long run.
FAQs on Fixed Deposit for Students
- Which is the best fixed deposit for students?
It depends on the current interest rates the banks offer for FDs. These interest rates on fixed deposits in different banks keep changing from time to time so make sure to check the latest rates on the bank's official website.
- What is the minimum amount for students to open a fixed deposit?
The minimum amount for opening a fixed deposit varies from bank to bank. It is recommended to check the bank’s official website for more information.
- What are the minimum and maximum FD tenors available for students?
Students can open FDs with terms ranging from a minimum of 7 days to a maximum of 10 years.
- What are the documents required to open a fixed deposit for students?
You will need documents proving your age, residential address, FD application form, and recent passport-size photographs.
- What are the drawbacks of FDs for students?
You will be charged a penalty if you withdraw the FD before it matures. Although FDs are safer the returns are low when compared to those offered by other market-linked investments.
- Is it safe for students to invest in fixed deposits?
Yes, since fixed deposits are considered to be one of the safest investment options it is a great option for students to invest their money.
- Can students take loans on fixed deposits?
Yes, students can use a percentage of their fixed deposits as collateral for loans.
- Can students open a fixed deposit online?
Yes, various banks give the option to open a fixed deposit online.
- What is the current FD interest rate that the NBFCs are offering for students?
The interest rate on NBFC fixed deposits varies and depends on the tenor and the deposit amount.
- Is an FD a better option than a savings account for students?
Yes, in the long run, it is better to open a fixed deposit than to keep the money in a savings account since the interest rates are higher for longer tenors.
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