What is Flexi FD

Fixed Deposits (FDs)
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what is Flexi FD?

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Honestly, I had the same question when I came across it a while ago. I researched and learnt, it’s actually a pretty smart option for people who want both the flexibility of a savings account and the higher interest of a fixed deposit.

Let me break it down for you.

A Flexi FD, or flexible fixed deposit, is like a hybrid of a savings account and a regular FD. What happens is, your bank links your savings account to a fixed deposit. So, if your savings account balance goes above a certain limit, extra money automatically gets transferred to an FD, where it earns higher interest.

And the cool part is if your balance goes low and you need money urgently, the bank will automatically break the FD partially and move the required amount back to your savings account. No need to break the entire FD or wait for maturity. That’s why it’s called Flexi, because it gives you flexibility and liquidity.

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For me personally, I feel a flexi fixed deposit is the best of both worlds. I like it because you get the steady returns of a fixed deposit, but with the flexibility of a savings or recurring account. Nowadays, most of the Indian banks offer this facility.

So, what makes them so appealing? Let me explain:

  1. The most important and exciting one is the freedom to choose the tenure. You can opt for flexi FDs to save for a short trip or plan retirement.
  2. Another benefit is that you can deposit or take out money whenever you require (depending on your financial requirements and convenience).
  3. You can avail attractive interest rates (mostly higher than regular savings accounts).
  4. Moreover, you can choose the amount you want to invest.
  5. You can avail loans against your flexi FDs, as per your bank’s policies.
  6. You don’t have to worry about renewal, as banks generally renew it automatically.
  7. And, lastly, creating a flexi FD account is simple and hassle-free.

Let me mention some banks that offer flexi fixed deposit schemes:

  • State Bank of India

With a minimum amount of ₹ 5,000, you can create a flexi FD with SBI.

  • Bank of India

Under the name of “Star Flexi Recurring Deposit Scheme”, you can invest money as per your wish between 12 months and 10 years.

  • Axis Bank

Axis Bank also has a scheme, “Encash 24 Flexi Deposit”, where you can keep your money for 6 months only.

So, choose wisely and earn the most with one of India’s safest investment options.