7 types of FD schemes that can increase your savings in a safe way. Every investor should know this easy way to get guaranteed returns without risk.

Investing in Fixed Deposit (FD) has always been the choice of investors. It is considered a safe and good return option. In FD, you deposit a lump sum amount for a fixed time and get guaranteed returns without any market risk. But do you know that there are not one or two but 7 types of FD, which is important to understand. So here we are telling you about 7 different FD options, which can be useful according to your financial needs.

1. Regular Fixed Deposit

Regular Fixed Deposit is the most normal and famous. In this, you can invest for a time period ranging from a few months to several years. The interest rate is pre-determined and you can get it on a monthly, quarterly or yearly basis. This is an excellent option for those who want stable and assured returns without any risk.

2. Tax Saver Fixed Deposit

By the way, you get two benefits in this FD - interest and tax savings. Under Section 80C of the Income Tax Act, up to ₹ 1.5 lakh is exempted annually. It has a lock-in period of 5 years, that is, you cannot withdraw money before time, interest is taxable, but it is a good option for long-term savings.

3. Digital Fixed Deposit

Digital FD is a completely online fixed deposit facility, in which you do not need to go to the bank branch. Opening an account, completing KYC process and tracking returns on investment – ​​everything is done digitally. In fact, it is a very convenient, paperless and hassle-free investment option for tech-savvy and busy investors, which saves both time and effort.

4. Reinvestment Fixed Deposit (Reinvestment FD)

This option is also called cumulative FD. In this, interest is directly added to the investment amount. In this, interest is also paid on interest, due to which the amount increases on maturity. This is a good option for long-term investors who want to build a large amount instead of getting interest immediately.

5. Senior Citizen Fixed Deposit

Let us tell you that Senior Citizen FD* is specially designed for people above 60 years of age. It offers higher interest rates (from about 3% to 8.75%) than normal FD. In this scheme, you can choose short or long term as per your need. Regular interest payment makes it a reliable and safe option for stable income after retirement.

6. Fixed Deposit Plus

Fixed Deposit Plus gives higher interest rate but the minimum deposit amount for it is also higher than the rest. Yes, in this you can also choose the option of simple interest or compound interest. So it is great for high net worth individuals or those who make big investments.

7. Auto Fixed Deposit

It is a mixture of FD and savings account. In this, more money than the limit set in the savings account automatically goes into FD. This gives more interest on extra money. There may be a penalty on premature withdrawal, but this option is easy and convenient.

Although the purpose of every FD is different, somewhere tax savings, somewhere higher interest, and somewhere fixed income after retirement. Choosing the right FD can help you meet your financial goals and increase savings in a safe way. (Note: This article is for information only and should not be considered as investment advice in any way, suggest consulting financial advisors for investment)

5 FAQs

Q1-What is FD?

Fixed deposit is a banking scheme in which a fixed interest rate is given on depositing money for a fixed period.

Q2-Which FD gives the highest interest?

Corporate FD and Senior Citizen FD usually get higher interest rates.

Q3-Is investing in FD completely safe?

Bank FD is considered safe, especially when it is in banks regulated by RBI.

Q4-How do you get tax exemption in FD?

5-year tax saving FD is eligible for up to ₹1.5 lakh exemption under section 80C.

Q5-Can FD be broken prematurely?

Yes, but you may face penalty or lower interest rate for this.