Equitas Bank Fixed Deposit rate-2024
Introduction:
Equitas Small Finance Bank, established by Equitas in 2007 initially as a microfinance lender, earned its name from its focus on serving small financial needs. Headquartered in Chennai, it obtained its license from the Reserve Bank of India on September 5, 2016, operating as a subsidiary under Equitas Holdings Ltd.
The transition to a scheduled commercial bank occurred on February 4, 2017. Equitas Small Finance Bank is renowned for its provision of savings and locker facilities, with its fixed deposit scheme being particularly popular among customers.
The increasing popularity of Equitas Bank FD rates and its attractive features underscore the scheme's appeal. Recognized for its ability to gather small savings and deliver consistent returns, it stands as a reliable option for investors seeking stability and growth.
Key Features and Advantages of Equitas Bank Fixed Deposits
Characteristics and Advantages of Equitas Fixed Deposit:
Secure Investment Opportunity
Appealing Interest Rates
Option for Premature Withdrawal without Penalty after 6 Months
Equitas FD accepts deposits ranging from a minimum of Rs. 5000 with no maximum limit
Flexible Interest Frequency
Tenure spans from 7 days to 10 years for Equitas Bank FD
Facility for Loan against FD
Auto-renewal and Nomination Options are provided
Equitas small finanace Bank Fixed deposit-2024
Tenure
Interest
Rates (PA)
Interest Rate
for Seniors (PA)
15 to 29 days
3.50%
4.00%
30 to 45 days
4.00%
4.00%
46 to 62 days
4.50%
5.00%
63 to 90 days
4.50%
5.00%
5.25%
5.75%
18 months 1 day to 2 years
7.75%
8.25%
888 days
8.00%
8.50%
888 days
8.25%
8.75%
889 days to 3 years
8.00%
8.50%
Types of Equitas Bank of India FD Schemes
Regular Fixed Deposit (Interest Reinvestment Scheme)
This scheme allows the reinvestment of interest back into the principal deposit amount.Senior citizen FD depositors enjoy an additional 0.50% interest rate.Options for quarterly and monthly interest payouts are also available.For the monthly interest payout option, the interest rate undergoes a discounting process based on quarterly compounding.A nomination facility is provided for account holders.Preferential rates do not include the sweep-in facility for deposited funds.
Selfe Fixed Deposit
With the Selfe Fixed Deposit scheme, depositors can earn interest rates of up to 8.20% p.a. for a tenure of one year.The FD account can be opened independently without the need for a linked savings account.Deposit amounts range from a minimum of Rs 5,000 to a maximum of Rs 90,000.Senior citizen FD depositors receive an additional 0.50% interest rate.For the monthly interest payout option, the interest rate follows a discounting process based on quarterly compounding.
How to Open a Fixed Deposit Account with Equitas Bank
Opening an Equitas Small Finance Bank FD account can be done through both online and offline channels:
Online Procedure:
Navigate to the official website of Equitas Small Finance Bank.
From the top menu, choose 'Personal', then 'Banking', followed by 'Deposits', and finally 'Fixed Deposit'.
Opt for 'Open FD'.
Complete the displayed form and click 'Submit'.
A bank representative will contact the customer via email/phone to proceed with the FD booking.
Offline Method:
To open an Equitas Small Finance Bank FD account offline, visit the nearest branch.
Fill out the Equitas Small Finance Bank FD application form and provide all required documents along with the deposit.
Upon successful verification, the FD account will be opened.
Qualifications for Opening a Fixed Deposit Account at Equitas Bank
Qualification for Opening an Equitas FD Account
Individuals or entities meeting the criteria below are eligible to establish a fixed deposit with Equitas Small Finance Bank:
Resident individuals
Partnership firms
Hindu undivided families (HUFs)
Sole proprietors
Trust accounts
Limited companies
Necessary Documents to Open a Fixed Deposit Account at Equitas Bank
The documents required to initiate an Equitas Small Finance Bank FD include:
A completed fixed deposit application form
PAN Card
Proof of identification (such as Passport, PAN Card, Driver’s License, Aadhar Card)
Passport-sized photographs
Proof of address (like Aadhar Card, Electricity Bill, Telephone Bill, or other utility bills)
Proof of age (like Birth Certificate, Discharge Certificate, Matriculation Certificate, or PAN Card)
Early Withdrawal of Equitas Bank Fixed Deposit
Equitas Small Finance Bank permits early withdrawal from FDs. Upon withdrawal, the interest rate is adjusted to the effective rate as of the fixed deposit booking date.
The penalty is applicable solely to FDs with a tenure exceeding 7 days. For tenures less than 7 days, the bank does not accrue interest.
Role of Fixed Deposits in an Investment Portfolio
Investing in market-linked instruments carries risks, particularly when aiming for higher returns.
To achieve a balanced financial portfolio, it's crucial for investors to include safer investment options as well.
Fixed deposits offer a secure investment avenue with guaranteed returns, contrasting with higher-risk options.
Thus, even if investors incur losses from other ventures, they can offset some of those losses through the stable earnings from fixed deposits.
This strategy can help maintain financial stability in their overall investment portfolio.
Benefits of Investing in a Fixed Deposit Account
IFixed deposit accounts offer several advantages that make them appealing to investors:
Stable Returns: These accounts provide a constant interest rate, ensuring predictable and steady returns.
Low Risk: As FDs are not impacted by market volatility, they are considered low-risk, making them suitable for conservative investors.
Capital Preservation: The principal amount is secure, and investors are assured of receiving their initial investment plus the accrued interest at the end of the maturity period.
Flexible Tenure Options: Investors can select from various tenure lengths offered by banks, ranging from a few months to several years, to align with their financial objectives.
Ease of Investment: Setting up a fixed deposit account is easy, requiring only minimal paperwork and a straightforward application process.
Regular Income Stream: Particularly beneficial for retirees, FDs can provide a consistent income stream through periodic interest payouts (monthly, quarterly, or annually).
Loan Facilities: Fixed deposits can also serve as collateral for loans, offering financial flexibility while keeping the deposit intact.
Tax Benefits: Certain types of fixed deposits qualify for tax deductions under specific sections of the Income Tax Act, promoting long-term savings.
No Market Dependency: The performance of FDs is independent of market conditions, offering stability regardless of economic fluctuations.
Ideal for Short to Medium-Term Goals: FDs are well-suited for meeting short to medium-term financial objectives, such as purchasing a vehicle, funding education, or planning a holiday.
Drawbacks of Fixed Deposit Accounts
Fixed deposit accounts come with certain limitations, which are outlined below:
Taxation on Interest: The interest income from fixed deposits is taxable under "Income From Other Sources" when you file your Income Tax Returns (ITR). For those seeking tax-free earnings, options like Tax-Saver FDs, ULIPs, PPF, and government bonds may be more suitable.
TDS Applicability: TDS (Tax Deducted at Source) is deducted from the interest earned on fixed deposits, which can reduce the overall returns from your investment.
Comparatively Lower Interest Rates: Generally, fixed deposits offer lower interest rates, typically between 5% to 9% per annum, which may be less than other investment avenues, potentially limiting your investment growth.
Interest Rates and Inflation: Sometimes, the interest rates on fixed deposits may not keep up with inflation, leading to a decrease in the real value of your returns over time.
Fixed Interest Rates: Unlike other investments where rates might fluctuate, fixed deposits maintain a constant rate throughout their tenure. This means returns do not increase even if market or economic conditions improve.
Limited Access to Funds: Your funds are locked in for the duration of the deposit, restricting access to your money. Early withdrawal is possible but usually incurs penalties, affecting your total returns.
Understanding Loan Against Fixed Deposit
Investors with fixed deposits can secure a loan against their FD holdings. The maximum loan amount available can differ from one bank to another and is typically a specified percentage of the fixed deposit value.
The interest rates for loans against fixed deposits are generally lower than those for unsecured loans. Investors looking to take advantage of this should carefully compare interest rates.
The repayment period for such a loan is usually capped at the maturity term of the associated fixed deposit.
Tax Implications on Fixed Deposit Earnings
Interest earned from fixed deposits is subject to Tax Deducted at Source (TDS) according to the rules set forth in the Income Tax Act. This interest income is then reported on Income Tax Returns under "Income from Other Sources."
The Income Tax Department applies the TDS against the individual's total tax liability. However, TDS on interest income is only deducted when the total interest earnings across all sources exceed Rs. 40,000 annually.
If earnings are below this threshold, individuals should submit Form 15G/H to the financial institution to avoid TDS. Form 15G/H can also be submitted for interest earnings above Rs. 40,000, but in such cases, individuals must ensure they meet any remaining tax obligations themselves.
Additionally, if an individual invests in a tax-saving FD, they are eligible to claim a tax exemption on the principal amount up to Rs. 1.5 lakh per financial year.
What is a fixed deposit?
A fixed deposit is a type of savings account where money is deposited for a fixed period and earns interest at a predetermined rate.
How safe are fixed deposits?
Fixed deposits are considered very safe as they are not affected by market fluctuations and often guaranteed by the bank or financial institution.
Can I withdraw money from my fixed deposit before maturity?
Yes, but early withdrawal may incur penalties and result in lower interest earnings.
Do fixed deposits offer tax benefits?
Tax-saver fixed deposits qualify for tax deductions under Section 80C of the Income Tax Act but come with a lock-in period.
What documents are required to open a fixed deposit account?
Typically, you need identity proof, address proof, and sometimes a PAN card, along with the completed application form.
Author
Harish Malhi
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