How to compare fixed deposit rates and open an FD online on the JioFinance app

Deciding where to keep savings means weighing both safety and returns. Money in a savings account can be withdrawn at any time, but a fixed deposit (FD) can earn a fixed interest rate for a chosen period. The difficulty is that finding an FD with the right rate and tenure means checking many banks and financial institutions separately.

A platform that brings different FD options together can make this easier. With interest rates, tenures and issuer details in one place, you can pick an FD that suits your needs.

Earlier, opening an FD often meant going to a branch, filling in forms and keeping paper receipts. With an online FD, many of these tasks can be done through an app. In the traditional method, opening an account means visiting a branch and filling in paper forms, whereas online the application and verification are done digitally. Comparing rates once meant visiting different banks; now they can be seen in one place. Instead of keeping track of receipts, the deposited amount can be viewed in the app. Tenure options used to depend on what the institution offered; now one can choose from the available options.

Before opening an FD, check the interest rate, tenure, issuer and payout method. Small finance banks and NBFCs may have different rates and conditions. Some small finance banks offer good interest rates on FDs. The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures eligible bank deposits up to Rs 5 lakh per depositor per bank, under the applicable rules. Some NBFCs also state credit ratings such as AAA and AA+ along with their FD rates. These ratings are given by recognised credit rating agencies and help investors understand the issuer's credit standing.

There are two kinds of payout as well. In a cumulative FD, the interest is reinvested until maturity. In a non-cumulative FD, depending on the product, interest may be paid at intervals such as every month or every quarter.

There are four simple steps to open an FD online. First, look at the interest rate, issuer and tenure of the available FDs. Then provide the required details and complete verification online. Next, choose the payout: cumulative if the interest is to stay invested until maturity, and non-cumulative, where available, if interest is wanted in between. Finally, make the payment by an available method and receive confirmation of the FD in digital form.

An FD strategy is not limited to finding a high interest rate. The investment should also match your liquidity, income and tax planning needs. Instead of putting the entire amount in one FD, it can be split across tenures, such as one-year, two-year and three-year FDs. This can make money available at different times. Senior citizens may get extra interest on eligible FDs, which varies by issuer, so check the terms before investing. A 5-year tax-saving FD may qualify for tax benefits under the applicable tax rules and conditions, but it carries a five-year lock-in. Choose the tenure according to when the money may be needed, and do not lock up money required for short-term expenses.

Before investing, check the minimum deposit, the maturity period, how often interest is paid out and the rules on premature withdrawal. Also check whether the stated rate applies for the entire tenure and whether senior citizens get a benefit. When comparing bank and NBFC FDs, read the issuer details and terms carefully.

In short, choosing an FD is not just a matter of finding the highest interest rate. Decide after looking at the issuer, tenure, payout option and your own financial needs. The JioFinance service brings FD options to one place, so rates and terms can be examined before an investment decision.