Quick Short-term FDs vs Convenient Flexi FDs

Flexi FDs and short term FDs come with certain basic differences that can prove extremely beneficial to a conscientious investor. For example, It might help to know that flexible fixed deposits are built along the same lines as regular fixed deposits, but they are customized to suit changing needs. These fixed deposits allow premature withdrawals and are highly liquid. Short term FD is an instrument that involves investing a sum of money in an account and letting it grow over a short tenor. These deposits are ideal for raising small amounts of cash over a short tenor. There are numerous other features you ought to know about Flexi FD and short term FD before you apply for Flexi FD or quick-return FD. Once you know this set of features and benefits, you can make the final call and choose the one that suits your requirements the most.

Benefits and Features of Short Term Deposits

• This is just like any other fixed deposit. It involves locking a sum of money into an account over a period, where it gains interest.
• This investment option, however, features a short lock-in period.
• The tenor for this deposit can range from 7 days to 2 years.
• The minimum amount for deposit varies; most institutions have a minimum amount of Rs. 10,000.
• It is an extremely safe form of investment and does not get influenced by market forces.
• The interest rates are stable and attractive—usually double the interest rates for savings accounts.
• It is also important to note that the returns from these deposits can be taxable.
• It is ideal for short term purposes like acquisition of a new vehicle or purchasing a gift for a family member.
• There is no liquidity without a penalty, so it is better not to withdraw this amount until the end of the tenor.

Benefits and Features of Flexi Deposits

• This deposit works on the same principles as regular deposits, except it features flexible range of features.
• This deposit is extremely easy to start. The overall application process is short, transparent, and easy to go follow.
• These deposits feature a flexible tenor. Various institutions offer you different maturity terms depending on your needs.
• In certain cases, institutions offer an added loan against FD on applying for flexi deposits.
• These are the deposits that feature auto renewal. Auto renewal means that the FD is immediately renewed without going through any additional formalities.
• As is true with other deposits, these deposits let you freely choose the amount that you seek to invest.
• These deposits have relaxed rules for premature withdrawals. In these FDs, you can withdraw your FD anytime without having to pay any penalty.
• With such good liquidity, these FDs can be used as a mode of cash anytime the need arises.
• These FDs can be used for a range of purposes like purchasing a new vehicle or buying your loved one a gift.
• They offer investors attractive interest rates that guarantee better growth and maturity of the FD over the length of the tenor.
• Either the tax on the interest earnings of these FD are deducted at source or need to be declared when filing your IT.
• If you seek to withdraw your FD, you just need to inform the bank or financial company in advance.

These are some benefits of both short-term FD and flexi FD. You can choose any one based on your requirements. If you seek quick returns you can go for short term deposits and if relaxed terms and flexibility is your priority, flexi deposits are your best bet. Hurry and apply for a winning fixed deposit scheme. Bajaj Finance offers you flexible tenor, attractive interest rates and various other facilities.