A Fixed Deposit account is a saving instrument that enables you to build on your wealth. In a typical Fixed Deposit scheme, the investor invests a lumpsum amount of money in the account for a certain period of time and earns interest on the same. Fixed deposit accounts offer a higher rate of interest when compared to other savings accounts. The tenure of a Fixed Deposit account can range anywhere between 7 days to 10 years. There are two types of Fixed Deposit schemes under the regular Fixed Deposit scheme- Long term and Short term scheme. Short term fixed deposits have a tenure ranging from 7 days to 3 years while long term deposits come with a tenure of more than 4 years.
Long term fixed deposit accounts are better suited for individuals who can invest a lumpsum amount of money for a longer period of time. Long term fixed deposits also offer a higher rate of interest as compared to short term fixed deposits.
A long term fixed deposit will not only get you a better rate of interest for your long term fixed deposit accounts but will also help you plan for your long term goals. Investing in a Long Term fixed deposit will ensure that you get a higher rate of interest, thus resulting in higher returns. A long term fixed deposit will help you save up for a major event in your life such as a wedding, a vacation or a medical procedure. Investing a small amount of money and planning ahead will help you earn better returns and thus, achieve your long term goals. There are many long term fixed deposits that offer tax saving features such as the five year fixed deposit schemes that come with a tenure of 5 years. The tax saving fixed deposit offers tax benefits under section 80C. Premature or partial withdrawals are not allowed in tax saving fixed deposits.
Long term fixed deposit schemes usually come with a tenures that range between 2-10 years. As of now, 10 years is the maximum tenure offered for a fixed deposit scheme in India. The eligibility criteria for a long term fixed deposit scheme depends on the bank offering the scheme. Most of the banks have a cap on the amount that can be invested in the account. It is also important to note that some banks have a strict policy on premature or partial withdrawals while the rest charge a penalty on the same.
Given below is a list of banks that offer long term fixed deposit schemes to regular customers, senior citizens and NRIs:
Long term fixed deposit schemes offer a higher rate of interest when compared to short term fixed deposit schemes.
Yes, most of the banks offer special rates of interest for senior citizens for long term fixed deposit schemes.
Tax saving deposits which fall under long term fixed deposit schemes offer tax saving benefits under section 80C of the Income Tax Act, 1961.