Nearly everyone has a bank deposit account nowadays since it is the need of the hour. The benefits it comes with are too good to be passed upon. Bank accounts enable users to secure their life savings, children’s future, and manage financial risks. It also allows the user to earn a regular interest on the grounds of the money he/she has deposited in their respective accounts. This is a safe investment option with a correspondingly low rate of return.
Since these advantages vary from the account type and the bank, customers get enough encouragement to deposit enough amount that would accumulate a higher rate of interest. Moreover, in times of need, these can also be easily liquified and do not require much time to withdraw the money. However, specific points must be kept in mind before approaching the doors of a bank to open a deposit account.
Modes of FD opening
Back in the days, it was compulsory for people to collect all the documents and visit the branch to open an account. However, the rise of the internet has changed everything altogether. Today, the customer may visit the branch if they wish to, or even open an account online. In the case of an in-person visit, specific documents are requested to verify the credibility of the customer. Nevertheless, in some cases, you may simply visit the bank’s website and ask them to contact you. You will be asked to provide certain information needed to open the savings account, and the amount and interest are directly debited and credited to and from it.
The monetary limit
The amount of the money you may deposit in your fixed account varies from bank to bank. Thus, it is highly recommendable to verify what each bank’s monetary limits are before making a deposit. While there are banks that don’t allow a large amount of deposits, there are others that require a minimum value to begin the account with. Thus, it is recommended to choose wisely.
The rate of interest
Sometimes the main reason people choose to deposit their money is to earn interest on their original amount. The rate of interest is therefore considered to be vital. Taking into account that every bank has its own interest rate, the final choice between banks shouldn’t be made without assessing this factor. One way to achieve this is to calculate the APY for a deposit. Sometimes the bank will publish that information themselves while other times you will need to do the calculation on your own.
A premature withdrawal
To increase the predictability of their cash flows and profits, banks tend to impose a penalty in case the owner withdraws the amount before its finalized dissolving date. However, the imposed penalty is a small percentage of the interest rate. It is applicable to both partial and full withdrawals. Thus, you need to decide whether you’d be able to keep the deposit for the specified time or might have to withdraw in-between.