What Is The Maximum Tenure Of Fixed Deposit (2024)

FAQs

What Is The Maximum Tenure Of Fixed Deposit? ›

Fixed Deposits are deposits where a particular sum of money is invested for a fixed duration. The duration of Fixed Deposits is flexible. It can range from 7 days to 10 years.

FDs come in various tenure ranges including short-term, medium-term and long-term. Long-term fixed deposits are usually held for anywhere between more than 5 years to 10 years. Generally, the tenure range offered on a all types of deposits (short, medium & long) range from 7 days to 10 years.

NRE FD: Minimum of 1 year, maximum of 10 years. NRO FD: Minimum of 7 days, maximum of 10 years.

Feel confident knowing exactly how much your money will earn. Lock-in a competitive interest rate from as short as 1 month to as long as 5 years.

Typically, the minimum deposit amount ranges from Rs 1,000 to Rs 10,000, depending on the bank. On the other hand, there is no maximum limit for FDs, allowing investors to park substantial amounts. Tenure and Premature Withdrawal: FDs are known for their fixed tenures, ranging from 7 days to 10 years or more.

Banks or post offices deduct tax or TDS when the aggregate interest income on all fixed deposits exceeds Rs 40,000 per financial year. The limit is Rs 50,000 in case of senior citizens.

That said, CD rates and bond yields remain only slightly higher than the current rate of inflation (which was roughly 3.2 percent as of late 2023), making it challenging for most retirees to generate enough income from their fixed income investments to live off their interest alone.

A term deposit or time deposit is a fixed-period investment option wherein the maturity period ranges from a few months to five years. Fixed deposits are deposits or a period of a few days to 10 years. The deposit amount offers a higher rate of return as compared to the banks' savings accounts.

Which bank gives 7% interest on savings account? ›

As of April 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.

While term deposits can be used for this purpose, a high interest savings account allows you instant access to your cash at any time and may offer a better interest rate than a shorter-length term deposit. These are goals you are planning to accomplish within the next one to five years.

Disadvantages of term deposits

If you need your money before the term ends, you may have to pay a penalty fee. You may only receive a proportion of the interest earnt, or none at all. Scammers are offering fake investments advertised to be 'like a term deposit' that claims to be a 'new breed of investment'.

The RBI on October 26, 2023, increased the minimum amount for non-callable term deposits to Rs 1 crore, from Rs 15 lakh. Banks prefer deposits that stay for a longer period or are locked in for a certain period.

You will not be able to add or invest more money to an on-going (existing) Term / Fixed Deposit. You can, of course, continue to save by investing in a new term / Fixed Deposit with a fresh value date. Was this information helpful?

A Tax-Saving Fixed Deposit (FD) account allows one to save taxes while earning interest. It offers a tax deduction of up to Rs 1.5 lakh per year under Section 80C of the Income Tax Act, 1961.

If a fixed deposit is unclaimed after two or three consecutive tenors, the bank may try to contact you for further instructions on how to go ahead with the investment. If the bank cannot track down the investor or nominee, it will continue to auto renew the fixed deposit at the current rate of interest.

After the completion of 10 years, the term deposit will have to be renewed if you want to continue to hold to it. Otherwise, it has to be withdrawn. In case you forget to renew it, it will be auto-renewed for the same tenure if you have given maturity instructions.

An FD can be renewed or withdrawn when it reaches maturity. The renewal clause is provided as an auto-renewal feature, in which the bank or financial institution would automatically renew your deposit for the same term and interest rate upon maturity.

The penalty for breaking an FD before maturity varies depending on the bank or financial institution and the terms of your FD. Typically, it involves a reduction in the interest rate, usually 0.5% to 2%. The penalty amount may vary from one bank or financial institution to another.