A bank account is one of the most important components of a working person’s financial plan that helps to save money for the future. Also, you can grow your money along with easy deposition and withdrawal of money. One such scheme is term deposit.

This article deals with term deposits and their important features for a better understanding.

A term deposit is a type of deposit where the customers put their money into a financial institution for a fixed period. The financial institution also sets a predetermined rate that offers interest higher than just a regular account.

The funds can be withdrawn after the period's completion or reinvested, depending on the customer's whims.

In this part, we have discussed some of the very important features that are associated with a term deposit:

• Maturity Period is Well-Known: The maturity period lies in the hands of the customers, and they choose it according to their convenience. Longer investments offer higher rates.
• Steady Interest Rate: Because the interest rates don’t depend on the market, the interest rate remains the same from the start till the completion of the maturity period.
• Additional Benefits for Old-Age People: Financial institutions offer much higher interest rates when compared to regular customers. So, if you want to grow your money faster, you can just invest using your parent's name!
• Subtracted TDS on Earnings: Term deposit incomes fall under the “Earnings from Other Sources” category. Hence, TDS is subtracted from the interest earned over the deposited sum.
• Money can be Rolled Over: If you do not wish to withdraw your matured amount, it can be reinvested for a fresh time period, and thus, in the next tenure, your income will be on the deposited amount and the income from the last tenure.

Let us look at some of the advantages that a customer can enjoy while investing in a term deposit:

• Assured Earnings: The stable interests ensure that the customers enjoy assured earnings at the end of their maturity period. This will help them plan a better future for them.
• Flexible Payouts for Earnings: The earnings from the term deposit can be withdrawn after the completion of the maturity period or can be withdrawn at the convenience of the customer. He/ She can have the withdrawal monthly, quarterly, or annually.
• Covered by Deposit Insurance: Every term deposit made in a financial institution gets covered under the DICGC insurance policy, and the coverage is up to ₹5,00,000 on their deposits.
• Flexible Termination Date: It completely depends on the customer to fix a maturity date and decide the period for deposition. Also, the conditions cannot be changed mid-time as they are finalised during the purchase.

Steps to Open a Term Deposit Offline

• Step 1: Procure the application form after reaching the bank.
• Step 2: Fill in all the relevant and proper information and the amount of money and tenure you want to invest.
• Step 3: Submit the form to the bank employees and the required documents.
• Step 4: Deposit the amount of money either in cash or cheque.
• Step 5: The bank will process your request and open it very shortly.

Steps to Open a Term Deposit Online

• Step 1: Head to the official website of your chosen bank.
• Step 2: If you have existing login details, use them and log in or go ahead with a new ID.
• Step 3: Select the tab “ Open a term deposit account”.
• Step 4: Fill in all the required information needed for the process.
• Step 5: Pay using the net banking option and download the receipt provided.

The documents that are necessary to go on with a term deposit are:

• Voter ID card
• Aadhaar Card
• PAN Card
• Passport-size photographs
• Passport
• Driving

All these documents are required by the financial institution for KYC verification.

Term deposits come in handy when an individual wants to grow his money gradually with the help of a steady interest rate. Therefore, it is highly recommended that interest rates be fixed throughout the tenure.