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How to open a fixed deposit

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Fixed deposits have never seemed as alluring, with equity markets seemingly keen on discovering how far they can fall. What's more, interest rates on deposits are rather attractive at present. Opening a fixed deposit may not be as quick as buying stocks, but it isn't a hassling process either. Here's detailing how you can open a bank fixed deposit and a corporate fixed deposit.

Bank deposits

The minimum amount to be deposited varies with banks, but is usually around Rs 10,000. If the foremost question on your mind regarding deposits is if you need a savings account with the bank, rest assured.

Most banks don't require you to be a savings account holder first, though there are some benefits. For instance, if you have internet banking enabled with your bank, opening a fixed deposit may only require you to log on and open a fixed deposit. You can choose the kind of deposit you want to make, the time period, and the amount.

Other benefits include overdraft facilities and linking the deposit to your bank account and enabling the sweep-in and sweep-out facilities.

However, online or not, opening a deposit in other banks is hardly a taxing process.

It simply involves filling out a form, putting together a set of documents and your photographs and submitting them. The bank will issue a fixed deposit receipt which you need to hold on to.

While all banks have the required forms at their branches, a good many, such as Kotak Mahindra Bank or Axis Bank, have them available on their Web site. Download, print and fill these out.

Still others such as HDFC Bank, ING Vysya, Axis Bank and ICICI Bank allow you to submit details online, post which the bank sends a representative to collect the form and necessary documents.

You can also opt to submit them at the closest bank branch itself, but in such a case, you have to go in person. Forms are either available under the ‘Accounts and Deposits' tab on the Web site or in the ‘Downloads' section.

Documentation

Documents required are for proof of identity, address, signature, and in case of senior citizenship, age. There are a variety of documents you can produce for proof of identity and address, such as your passport, driving license, voter's identity card, PAN card, ration card, recent utility bills, credit card bills and so on.

Signature proofs can take the form of passport, PAN card or a signed cheque. Apart from this, some banks, such as Axis Bank, also demand an introduction letter from an account holder.

Company deposits

The process for opening company deposits is similar to that of a bank deposit. Forms can be downloaded from the company Web site or taken from the manager of the deposit scheme.

Submission of the filled-out form, along with the cheque for the deposit amount, should be done at the bank branches specified by the company or to the manger of the issue. Note that only bank deposits up to Rs 100,000 are insured.

(This article was published on December 24, 2011)
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