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Long Term Fixed Deposit(FD)

Fixed deposits have been known to be among the best investment tools. FDs are a form of investment that guarantees return and fixed long-term FD interest rates, and that is why they are known to be among the most secure investments. FDs are also famous because of the high-interest rates they offer in comparison to other secure forms of investments. Different forms of FDs are offered among different banks, and with major differences, often the most important one being tenure. The long-term fixed deposit has soared in fame, with people wanting to construct their corpus over the long term.

Meaning of Long Term FD

Long-term FDs have been a preferred investment tool for a lot of investors over time. Only in recent times the process of applying for an FD long-term has shifted to online. 

Fixed deposit accounts are available in all of the scheduled commercial banks - as well as several NBFCs and HFCs in the country. You can check the ratings of the financial institution issued by organizations before investing in FDs provided by an NBFC or HFC. This is to ensure that your funds are secure.

Banks and other financial organizations in the private sector may charge a somewhat higher interest rate than public sector banks.

Some of the Best Long Term Deposit Interest Rates

The table below mentions some of the best interest rates offered for long term (10 years) fixed deposits:

Bank's Name

Interest Rates Offered to Regular Citizens

Interest Rates Offered to Senior Citizens

Punjab National Bank

5.25%

5.75%

HDFC

6.00%

6.50%

SBI

6.50%

7.00%

Axis Bank

6.90%

7.40%

Citibank

5.25%

5.75

 

Access to fixed deposits
of various banks
Invest without opening
a new bank account
Avail high interest rates
of up to 6.5%
OPEN FD ONLINE

How to Apply for a Long Term Fixed Deposit?

The application process for this sort of time deposit is fairly similar to that of the standard technique. You can either apply online through net banking or fill out an online application by going to the bank's website. Here are two ways that you can open an FD account - and they are:

1) Online

Step 1: Log in to your chosen bank's online banking account.

Step 2: Among the available options, look for the option "Open a Fixed Deposit Account" and select it.

Step 3: Fill in the essential information on the online application form.

Step 4: All of the needed papers should be uploaded as soft copies.

Step 5: If applicable, mention a nominee for the maturity amount.

Step 6: Complete the application and transfer the amount you want to invest.

2) Offline

Step 1: Pay a visit to the bank or financial institution's nearest branch.

Step 2: Request an FD application form and fill it out completely with the necessary information.

Step 3: Attach the requested documents to the application form, such as evidence of identification and address, and submit them at the counter.

Step 4: Please provide a check or cash for the amount you wish to invest.

Step 5: Your application will be processed, and your account will be opened according to the bank/financial institution's deadlines.

Advantages of Investing in the Long-Term Fixed Deposit

Mentioned here are some of the major advantages of investing in the long term fixed deposit:

  • A loan can be taken out against the term deposit at a substantially lower rate than the market rate.
  • It can be used as a security deposit when applying for a credit card.
  • There are overdraft options accessible.
  • Fixed deposit returns are guaranteed by banks. Therefore the risk factor is nearly minimal.
  • Long-term deposits may be offered at a higher rate of interest by some banks or non-banking financial companies (NBFCs).
  • For a period of ten years, one can even invest in long-term tax-saving FDs.
  • Senior citizens will benefit from this product because the rate of interest paid is substantially greater for this age group. These FDs will assist you in achieving your long-term financial objectives.
  • Instead of putting money in a savings account, this is a good way to save money.

Eligibility

To open an FD account in India, you must meet the following requirements. There could be other bank-specific criteria.

  • Minors
  • Blind people
  • Illiterate people
  • Individuals that are Indian residents
  • Joint account by two or more people
  • Senior citizens
  • Religious & educational institutions
  • Companies
  • Partnership firms
  • Non-Resident Indians (NRIs)
  • Sole proprietorship companies
  • Societies, trusts, clubs, associations, etc

Comparison of FD rates

Name
Tenure
Highest Interest Rates
1
2
3
4
5

FAQs

Q1. Is a long-term fixed deposit a good investment?

Long-term fixed deposits are a great financial solution as you could use them to get a loan against it and much more.

Q2. Can I invest in a long-term FD for 20 years?

FD period would range from 7 days to 10 years.

Q3. Is it true that all banks give a greater interest rate on long-term FDs than on short- or medium-term FDs?

No. This isn't the case at all. Though some banks may provide a greater interest rate for a longer-term, this is not always the case. Each bank has its own rate of interest, which may or may not be higher in the longer term.

Q4. Where else can I apply for these types of FDs besides banks?

Aside from banks, Non-Banking Financial Companies (NBFCs) and other financial institutions provide a variety of fixed deposits, including long-term time deposits.

Q5. What is the minimum deposit amount for a term deposit like this?

In most cases, a term deposit of this type requires a minimum investment of Rs.1,000. This sum, however, varies from bank to bank.

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