IDBI Bank Fixed Deposit rates-2024
Introduction:
IDBI, abbreviated from Industrial Development Bank of India, is an Indian banking and financial services corporation headquartered in Mumbai, Maharashtra.
It provides an extensive array of banking products and services, including fixed deposits (FDs), to its clientele.IDBI Bank presents various FD options to its customers, enabling them to save money for a predetermined duration and accrue interest on their deposits.
Depositors are only allowed to make a single deposit when opening an account with the bank; additional deposits during the tenure are not permitted. Opening an FD account with IDBI Bank offers numerous benefits, such as access to loan facilities, auto-renewal options, and more.
Key Features and Advantages of IDBI Bank Fixed Deposits
Characteristics and Advantages of IDBI Fixed Deposit:
Availability of loans of up to 90% against deposited amount
Flexible tenure spanning from 7 days to 20 years
Competitive interest rates
Senior citizens enjoy an additional interest rate of 0.50% above the regular rates
Convenient auto-renewal feature
Diverse deposit options to suit various needs
IDBI offers quick and hassle-free liquidity options
Choice of interest payout frequency: monthly, quarterly, or annually, based on individual preferences
IDBI Bank FD Interest Rates 2024
Tenure
Interest
Rates (PA)
Interest Rate
for Seniors (PA)
1 month 1 day - 1 month 15 days
3.25%
3.75%
1 month 16 days - 1 month 30 days
4.25%
3.75%
2 months - 2 months 29 days
4.5%
5%
3 months - 5 months 27 days
5.25%
5.75%
5.75%
6.25%
8 months 27 days - 9 months 24 days
6.25%
6.75%
9 months 26 days - 11 months 30 days
7.05%
7.55%
9 months 26 days - 11 months 30 days
6.25%
6.75%
1 year - 1 year 9 days
6.8%
7.3%
Types of IDBI Bank FD Schemes
IDBI Bank Suvidha Fixed Deposit (Regular Fixed Deposit with Reinvestment of Interest Component)
This plan enables the reinvestment of the interest component into the deposit amount.
Minimum deposit amount: Rs. 10,000.
Tenure: 7 days – 20 years.
Senior citizen FD depositors receive an additional 0.50% interest rate.
Auto-renewal facility is available.
Options for monthly, quarterly, and annual payouts are available.
Depositors can obtain overdrafts of up to 90% against their fixed deposits.
This plan offers Sweep In Savings, allowing linkage of a savings account with multiple FDs.
IDBI Suvidha Tax Saving Fixed Deposit
Depositors can invest up to Rs. 1.5 lakh in a financial year for 5 years.
The bank offers a complete door-to-door banking experience.
Tenure: 5 years.
IDBI Floating Rate Fixed Deposit
Minimum deposit amount: Rs. 10,000, and thereafter in multiples of Rs. 1,000; Maximum- Less than Rs.1 crore.
The interest rate is reset every 3 months, coinciding with calendar quarters: April 1, July 1, October 1, and January 1 every year.
Tenure: 1 year – 20 years.
Depositors can avail of overdrafts of up to 90% against their floating-rate fixed deposits.
Nomination facility is available.
Senior citizens receive an additional 0.50% interest rate.
Lock-in period: 1 year.
Auto-renewal facility is available for tenures above 1 year only.
Premature withdrawal is not allowed for up to 1 year.
Quarterly payout option is available.
IDBI NRE Fixed Deposits
Minimum deposit amount: Rs. 10,000.
Tenure: 1 year – 10 years.
Depositors can opt for monthly/quarterly interest payouts or cumulative interest options.
No interest will be paid if the FD is closed prematurely within 1 year.
Loan against deposits facility is available.
Automatic renewal facility is available on maturity.
IDBI Bank NRO Fixed Deposits
Tenure: 15 days – 10 years.
Depositors can opt for monthly/quarterly interest payouts or cumulative interest options.
Loan against deposits facility is available.
Automatic renewal facility of fixed deposits is available on maturity.
IDBI Bank Foreign Currency Non-Resident (FCNR) Scheme
Depositors can hold deposits in any of these 9 currencies: US Dollars (USD), British Pound Sterling (GBP), Euro, Australian Dollar (AUD), Canadian Dollar (CAD), Hong Kong dollar (HKD), Singapore Dollar (SGD), Swiss franc (CHF), and Japanese Yen (YEN).
Minimum deposit amount: USD 1,000 or its equivalent in other currencies.
Tenure: 1 year – 5 years.
Principal and interest earned are fully repatriable.
No penalty for premature closure.
No interest will be paid if deposits are closed before 1 year.
Loan against deposits facility is available.
Depositors can opt for half-yearly interest payouts or cumulative interest options.
An automatic renewal facility is available.
How to Open a Fixed Deposit Account with IDBI Bank
Opening an FD account with IDBI Bank is possible through various channels, including Mobile App, Internet Banking, and offline methods.
Internet Banking:
To open an IDBI Bank FD account via internet banking, follow these steps:
Log in to your IDBI Bank NetBanking account.
Navigate to the ‘Request’ tab and select the ‘Opening a Fixed Deposit’ option.
Enter all the required deposit details and maturity instructions.
After verifying the information, click the ‘Submit’ button.
Upon successful booking of the deposit, a confirmation notification will be displayed.
Note that the nominee information must be physically filled out and submitted to IDBI Bank.
Mobile App - IDBI Bank App:
To open an FD account via the IDBI Bank Mobile App, follow these steps:
Download the IDBI Bank App and sign in.
Choose the ‘Opening a Fixed Deposit’ option to proceed.
Enter all the necessary details and verify them.
Click the ‘Submit’ button to confirm the booking of the deposit.
A confirmation notification will be displayed upon successful booking.
Similarly, the nominee information needs to be physically filled out and submitted to IDBI Bank.
Offline Opening of IDBI Bank FD:
For offline opening of an IDBI Bank FD account, visit the nearest IDBI Bank branch. Fill out the IDBI Bank FD application form and submit all the required documents along with the deposit amount. Upon successful processing of the application, you will receive an FD receipt from IDBI Bank.
Qualifications for Opening a Fixed Deposit Account at IDBI Bank
The following categories are eligible to start fixed deposit investments with IDBI Bank:
Residents
Individuals and joint account holders
Minors
NRIs via NRE and NRO accounts
Hindu Undivided Family or HUF
Senior citizens
Sole proprietorships and partnerships
Firms
Educational or charitable institutions
Necessary Documents to Open a Fixed Deposit Account at IDBI Bank
Required Documents for Opening IDBI FD Providing valid identity and address proofs is essential when applying for an IDBI Bank FD. Additionally, minors and senior citizens must furnish proof of their age.
Here's an overview of the necessary documents:
Application form.
Photo identification proof, such as Voter ID, PAN card, Aadhaar card, driving license, etc.
Address proof document, including utility bills, driving license, Aadhaar card, etc.
Proof of age (birth certificate, PAN card, matriculation certificate, etc.).
Passport-sized photographs.
PAN card.
Early Withdrawal of IDBI Bank Fixed Deposit
IDBI Bank allows premature withdrawal of fixed deposits, with the exception of tax-saving fixed deposits. However, the bank imposes a penalty for early withdrawal before the FD tenure ends. The penalty is applied according to IDBI Bank's terms and conditions.
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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