A Flexi-Fixed deposit is a special kind of deposit offered by Indian banks and in other countries as well. It is formed by combining a demand deposit and a fixed deposit. The depositor opting for a Flexi FD is able to avail of both the liquidity of savings and current accounts and the high returns of fixed deposits. Fixed Deposits have been one of the most popular and traditional saving instruments in India for years.
All flexi-fixed deposits have a major feature that combines the advantages of all the three accounts, viz. savings and current accounts and fixed deposits which is the “Auto-sweep feature (sweep-in)”. Under this feature, the excess balance of a stipulated amount is transferred to a fixed deposit (FD) account automatically for a default term of one year.
Features of Flexible Fixed Deposits
Flexible tenure: Flexi fixed deposits are designed in such a way that it offers the advantages of flexible tenures. The depositor can select the tenure, as per his/her financial objectives.
Competitive interest rates: Flexi fixed deposits usually provide higher interest than savings accounts, which in turn enables the depositor to create a large corpus.
Investment amount: It is up to the Depositors to decide the investment amount they currently hold or on the basis of the corpus that they want to achieve at the end of the tenure.
Premature withdrawal: Another major benefit of Flexi fixed deposits is that it allows liquidity to depositors with the premature withdrawal feature they provide. This benefit, however, varies from bank to bank that offers the Flexi fixed deposits. Hence, you need to make sure that you go through the rules and regulations before deciding the final one.
Loan facility: Depositors can avail of the benefit loan facility from the bank where they have their Flexi fixed deposit scheme by keeping it as collateral for the loan. But you should make sure that you are aware of the policies of your bank.
Easy account opening process: Opening a Flexi Fixed Deposit account is easy, seamless, and hassle-free.
Auto-renewal: One more feature that makes the Flexi FD enticing for a lot of investors is the hassle-free account opening process which is made even quicker and much easier with the auto-renewal facility. This means that a depositor has his/her Flexi fixed deposit account automatically renewed at the end of the policy tenure.
Difference between Flexi Fixed Deposits and Regular Fixed Deposits
The Flexi Fixed Deposit’s benefits ensure that it has a clear edge over regular fixed deposits. This is majorly owing to the convenience of liquidity that they specialize in. Flexi fixed deposits ensure the advantage of availing loan facilities as well. Also, the depositor of this FD has the advantage of withdrawing a certain amount from the savings or current bank account that has been merged with the Flexi fixed deposit scheme.
Flexi Fixed Deposit Interest Rates
A lot of banks in India offer this scheme to its customers with competitive Flexi fixed deposit interest rates, some of which are mentioned below. One of the renowned banks for Flexi-fixed deposit is Union Bank of India (UBI) – The ‘Union Savings Flexi Deposit Account’, the Flexi fixed deposit scheme from the Union Bank of India, is designed in such a way that it offers the dual purpose of fixed deposits and saving deposits. This feature ensures that a variety of customer base with more varied financial objectives is served.
Allahabad Bank: The ‘Flexi Fix Deposit’ scheme by Allahabad Bank is focused on maximizing interest for their customers so that they can enjoy maximum returns. At the same time, it offers the option of liquidity of their funds. The minimum deposit needed to open a Flexi fixed deposit in this bank is Rs. 25,000.
State Bank of India (SBI): The minimum deposit needed to open a Flexi fixed deposit scheme in the State Bank of India (SBI) is Rs. 5,000, while the minimum tenure starts from 5 years. This scheme offers its customers the convenience of customizing their deposit amounts through flexible installments.
ICICI Bank Flexi Deposit Scheme: The Flexi Deposit Scheme offered by ICICI Bank combines a Savings or Current account with a Flexi Deposit. Individuals should ensure they maintain a minimum balance of Rs. 10,000 for a Savings account or Rs. 20,000 for a Current account. The tenure for a Flexi Deposit account ranges from a minimum of 15 days to 91 days.
Axis Bank: Axis Bank’s Flexi Fixed Deposit scheme, named ‘Encash 24 Flexi Deposit’, ensures liquidity that is typical to a Savings Account along with the benefit of interest like Fixed Deposit. The scheme term varies between 6 months and 5 years.
Bank of India: The ‘Star Flexi Recurring Deposit Scheme’ from the Bank of India offers its customers the convenience of opting between an individual and a joint account. The policy tenure ranges between 12 months and 10 years, which customers can opt for as per their investment objectives.
Flexi Fixed Deposit – FAQs
Ques. Who is eligible for Flexi fixed Deposit?
Ans. The SBI Flexi Deposit Eligibility is as follows:
- All resident Indians are eligible for this scheme
- Only individual individuals can apply
- Minors are also eligible for this scheme
Ques. How does Flexi Deposit work?
Ans. Flexi Fixed Deposit works just like a regular fixed deposit scheme with the added advantage of comparatively more flexibility and liquidity. Furthermore, certain Flexi fixed deposit schemes also serve the dual purpose of a savings scheme and fixed deposits.
Ques. How to withdraw money from the Flexi fixed deposit account?
Ans. You can withdraw money from your savings or current bank account that is already merged with your Flexi fixed deposit account.