Fixed Deposit: Features, Types and

Advantages(C) Axis Bank Ltd.

What’s a

Fixed

Deposit?

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• A can be defined as an investment in which you deposit your money in a Bank for a fixed lock-in period.

• In return, the Bank gives you an interest at a specified rate and that interest is added to the original deposit while paying the accumulated amount to customer at the time of maturity.

• Banks also give you the option of periodic pay-outs in the form of monthly and quarterly interest payments if you intend to use that interest as a source of regular income.

• Minimum amount: Rs. 10,000

• No maximum amount specified for deposit.

Interest on

Fixed

Deposits

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• Banks offer both fixed and floating rate of interest.

• Fixed rate of interest is unaffected by any change in market rates and stays constant during the deposit term.

• On the other hand, floating interest rates vary as per the market rates and keeps changing throughout the deposit term.

• For any fixed deposits below 6 months, Banks use simple interest while paying the sum at maturity.

• While for any deposits above 6 months in tenure, the interest is calculated using compound interest and it is compounded quarterly.

Types of

Fixed

Deposits

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Bank Fixed Deposits:• Bank Fixed Deposits are made with Banks.• Lower risk and comparatively lower interest returns• Great liquidity options.• Flexible lock-in periods.

Corporate fixed deposits:• Corporate Fixed Deposits are made with companies

who are looking for people to invest and fund their business.

• Higher risk and comparatively higher interest returns.• Liquidity options are not great.• Lock-in periods are not as flexible.

Advantages

of Investing

in Fixed

Deposits

(C) Axis Bank Ltd.

Advantages of Investing in Fixed Deposits

• Negligible risk

• Assured Returns

• Capital Appreciation

• Flexibility of parking additional capital

for small terms

• Tax benefits for 5-year deposits

THANK YOU

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(C) Axis Bank Ltd.