Federal Bank Fixed Deposit

Federal Bank offers multiple fixed deposits for various tenures with different interest rates to its investors. The interest rate on Federal Bank FDs is higher than their savings account. One can invest in Federal Bank FDs with just a minimum investment of INR 1,000. This article covers Federal Bank FD, its features and interest rates in detail.

Federal Bank Fixed deposit schemes.

Following are the types of FD schemes that Federal Bank offers:

• Fixed Deposit
• Cash Certificate
• Tax Savings Deposit
• Millionaire Deposit

Federal Bank Fixed Deposit

The Federal Bank Fixed Deposit is a good investment option for those who wish to invest and get periodical income (interest). Following are the features of the scheme.

• Tenure: 7 days to 10 years
• Minimum Deposit Amount: INR 1,000
• Maximum Deposit Amount: No Limit
• Interest Payout: Depositors can choose interest payment frequencies, monthly or quarterly or annually. The interest is credited to the Federal Bank Savings account automatically.
• Loan Facility: Depositors can get a loan against their FD; they can avail of a loan up to 90% of their deposit amount.
• Auto-Renewal Facility: Available
• Nomination Facility: Available

Federal Bank Cash Certificate

Cash certificate is a growth-oriented scheme. Also, the scheme is suitable for individuals looking to double their money in the shortest time at zero risks. Moreover, under this scheme, the interest is quarterly compounded and reinvested. Furthermore, the interest cannot be withdrawn until maturity. Following are the features of the scheme.

• Tenure: 6 months to 10 years
• Minimum Deposit Amount: INR 1,000
• Maximum Deposit Amount: No Limit
• Loan Facility: Depositors can get a loan against their FD; they can avail a loan up to 90% of their deposit amount.
• Auto-Renewal Facility: Available
• Nomination Facility: Available

Federal Bank Tax Savings Deposit

The Federal Tax Saving Deposit is a convenient and risk-free option that provides tax benefits to depositors. The deposits up to INR 1,50,000 per annum qualify for tax deduction under Section 80C of the Income Tax Act. Following are the features of the scheme.

• Lock-in period: 5 years
• Minimum Deposit Amount: INR 100 and in multiples of INR 100, thereafter
• Maximum Deposit Amount: No Limit
• Premature withdrawal: Not available
• Loan Facility: Not available

Federal Bank Millionaire Deposit

The scheme allows systematic investments over a period of time and helps the depositors become millionaires on maturity. Also, this is a unique recurring deposit scheme. Furthermore, the scheme’s monthly deposit amount and the tenure vary based on the type of investment option. The millionaire deposit scheme has the following types of investment options: Millionaire Federal Savings Fund, Multi-Millionaire Federal Savings Fund and Crorepati Federal Savings Fund. Following are the features of the scheme:

• Loan Facility: Available
• Premature withdrawal: Available, however, no interest is paid for withdrawals made before the completion of 1 year for NRE deposits.
• Nomination Facility: Available
• Eligibility: Any resident Indian or NRI customer can open a millionaire deposit account.
• Repatriable: The amount is freely repatriable for NRI customers.

Key Features of Federal Bank Fixed Deposit

• Tenure: The tenure of Federal Bank FD ranges from seven days to ten years. One cannot change the tenure of the Federal FD once it has commenced.
• Minimum and maximum investment: The minimum investment in Federal Bank FD is INR 1,000. However, there is no limit on the maximum amount of investment in Federal Bank FD except for the tax-saving FD, which is INR 1.5 lakhs.
• Federal Bank FD rates: Federal Bank FD rates range between 2.5% and 5.35% for regular citizens and between 3% and 6% for senior citizens. Moreover, the Federal Bank offers an additional 0.5% interest to senior citizens on their FDs. Interest is compounded quarterly but paid out as per the choice of investors. Investors can choose between monthly, quarterly, annually, or at the time of maturity.
• Premature withdrawal: All Federal Bank FDs can be withdrawn prematurely except for tax saving FDs. Also, the Federal bank charges a 1% penalty on the interest for all premature withdrawals irrespective of the tenure of investment.
• Loan against FD: Federal Bank offers loans against their FDs. Investors can get up to 90% of the deposit amount as a loan. Also, the interest rate for the loan will be as per the terms of the Federal Bank. Moreover, the loan is provided only against their fixed deposits and cash certificate.
• Nomination facility: Federal Bank FD investors can nominate beneficiaries for their FDs.
• Auto-renewal: Investors can opt for auto-renewal of their Federal Bank FDs.
• Safety: The Deposit Insurance Scheme of RBI covers all Federal Bank deposits. The scheme covers all Federal Bank deposits up to INR 5,00,000.
• Additional payments: Investors cannot deposit an additional amount in a Federal Bank FD once it has commenced. However, they can open a fresh Federal Bank FD with the new amount.

How to open a Federal Bank FD deposit account?

One can open a Federal Bank FD account through various modes such as Internet Banking, Mobile App and offline.

Internet Banking

The following steps will help an individual to open a Federal Bank FD account through internet banking:

• Login to the Federal Bank NetBanking account.
• On the home page, select the ‘Fixed Deposit’ option.
• Choose the type of fixed deposit scheme.
• Next, provide all the necessary details, nominee details, deposit duration, interest payout frequency, payment and maturity instructions.
• Verify the details and click on ‘Submit’ to complete the account opening process.

Through Mobile App

Federal Bank App

The following steps will guide in opening an FD account through Federal Bank Mobile App:

• In the home menu, select the ‘Fixed Deposit’ option.
• Choose the type of fixed deposit scheme.
• Next, provide all the necessary details, nominee details, deposit duration, interest payout frequency, payment and maturity instructions.
• Verify the details and click on ‘Submit’ to complete the account opening process.

Offline Federal Bank FD Opening

To open a Federal Bank FD account offline, one has to visit the nearest Federal Bank branch. Fill the Federal Bank FD application form and submit all the necessary documents along with the deposit amount. On successfully processing the application, Federal Bank will provide an FD receipt.

Documents required to Open a Federal Bank FD

To open a fixed deposit account with Federal Bank, one needs the following documents:

• FD application form
• Photographs of the depositor
• PAN Card
• ID proof (PAN Card, Driving License, Aadhar Card, and Passport)
• Address proof (Aadhar Card, Telephone bill, Electricity Bill)
• Age proof (Birth certificate, PAN Card, Discharge certificate, matriculation certificate).

Eligibility to Open a Federal Bank FD

To open an FD account with Federal Bank, one has to be eligible. Following are the individuals that are eligible to invest in Federal Bank FDs.

• Individuals, including minors
• Sole proprietors
• Partnership firms
• Joint-stock companies
• Hindu undivided families (HUF)
• Clubs, associations and trusts

Does the Federal Bank offer Recurring Deposits?

Federal Bank offers recurring deposits to its depositors. Federal Bank RDs have a minimum tenure of 180 days and maximum tenure of 10 years. The minimum investment in Federal Bank RD is INR 50, and there is no limit on the maximum investment. The interest rate for regular citizens is 4%-5.85% and for senior citizens is 4.5%-6.35%. One can invest in Federal Bank RD through either internet banking or mobile banking or by physically visiting a Federal Bank branch.

How are Federal Bank FDs taxed?

Only investment in Federal Bank Tax Saving FDs qualifies for tax saving up to INR 1,50,000 per annum. Investment in no other Federal Bank FDs qualifies for tax saving under Section 80C of the Income Tax Act. The interest income from Federal Bank FD is taxable as per the investor’s income tax slab rates. Moreover, the interest income is subject to a TDS of 10% if the income from Federal Bank FD exceeds INR 40,000 per annum. For senior citizens, the limit is INR 50,000 per annum. Also, if the investor doesn’t disclose PAN Card details to Federal Bank, then the TDS rate will be 20%.

What are the implications of opening an FD bank account without having a PAN?

If an investor doesn’t disclose PAN details to Federal Bank, then the bank will TDS at 20% instead of 10%. Also, Federal Bank will not issue a TDS certificate. Moreover, there won’t be a credit of TDS in income tax returns. Furthermore, all exemption certificates will be invalid.

In how many years will the FD double in Federal Bank?

To know in how many years Federal Bank FD will double, we can follow the 72 rule. Divide 72 by the interest rate, and the result will be the number of years the Federal Bank FD will double. For example, for a tenure of 10 years, the Federal Bank FD interest rate is 6% for senior citizens. An investor can double the investment amount by investing for this tenure in 12 years (72/6).

Frequently Asked Questions