What Are the Surprising Benefits Of A Fixed Deposit (FD)?

Fixed Deposits (FDs) have long been a staple of the investment landscape, providing a reliable and secure option for savers and investors alike. While many are aware of the basic benefits of FDs, such as guaranteed returns and low risk, several surprising advantages might not be immediately obvious. This blog discusses these lesser-known benefits and highlights why Fixed Deposits could be a wise choice for your financial portfolio.

1. Tax Perks

Tax-saving FDs offer the added benefit of a tax deduction under Section 80C of the Income Tax Act of 1961. With a lock-in period of 5 years, these FDs allow you to claim up to ₹1.5 lakh as a deduction per financial year. However, the interest earned is taxable, and premature withdrawal is generally not allowed.

2. Overdraft Facility

If you are experiencing a cash crunch, you can access an overdraft against your Fixed Deposit without having to liquidate it and incur penalties. HDFC Bank offers overdrafts up to 90% of your FD’s value, with a minimum deposit of ₹25,000 and a tenure of at least 6 months and 1 day. This facility is available instantly through HDFC Bank NetBanking. You will only pay interest on the amount drawn while your FD continues to accrue interest.

3. Flexible Interest payment option

You can choose to receive interest payouts on a monthly or quarterly basis. This option is ideal if you need regular income to manage your expenses or cover recurring costs. It provides a steady flow of funds while your principal continues to grow. Alternatively, you can opt to reinvest the interest earned back into the FD. This option allows you to capitalise on compound interest, where interest is calculated on both the initial deposit and the accumulated interest. Over time, this can significantly increase the overall return on your investment.

The HDFC Bank Sure Cover  Fixed Deposit combines the advantages of a traditional Fixed Deposit with a term life insurance cover. This means that you also receive a term life insurance policy while earning guaranteed interest on your deposit.

For the first year of your investment, you are provided with a life insurance cover equivalent to the principal amount of your Fixed Deposit. This insurance offers a financial safety net, ensuring that your family is protected in an unforeseen circumstance.

Tailored for residents aged 18 to 50, the Sure Cover FD provides a flexible tenure, allowing you to choose a term between 1 to 10 years, making it an ideal choice for those seeking investment growth and financial protection.

• Age group: Resident Individuals falling in the age group of 18 to < 50 years.
• Amount: The Fixed deposit amount varies from a minimum of ₹2 lakh and a maximum of ₹10 lakh
• Tenure: SureCover FD has a flexible tenure of a minimum of 1 year and a maximum of 10 years
• Interest rates: Earn assured returns, as the interest rates offered are the same as Regular Fixed Deposits. 
• Interest payment: A monthly/quarterly interest payout option is available.

Additionally, you can maximise your income with compound interest on reinvestment deposits.

HDFC Bank SureCover Fixed Deposit is an ideal income-generating product with   Fixed Deposits and term life insurance cover benefits. Invest in one today and secure your family’s future.

​​To Book an HDFC Bank SureCover FD, visit your nearest HDFC Bank branch today.

Use the FD Calculator and Get details of the maturity amount and interest earned on deposits.

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.