As an investor, one always wishes for the best possible returns from his/her investments without any risk of losing money. However, it is common sense that there is no such investment product. In reality, risk and returns are inversely related, i.e. with more risk come higher returns and vice versa. For an investor chasing long-term goals, it is important to make the best use of available investment options. Both fixed-income and equity-linked investments have a role to plan in the process of wealth creation. While equity-linked investments help in the process to generate high real return, the fixed income investments help in preserving the accumulated wealth so as to meet the desired goal. If, investors need more from their FD then “FD Xtra” by ICICI Bank is a good option for investors.

Now coming to the point, what is extra in it or say the benefits. .. The Bank has introduced FD Xtra, a variety of  new term deposits that includes three amazing features in them – free term life insurance with fixed deposit, fixed deposits with auto-investment in mutual fund SIPs and an option to take the maturity amount in installments.

Now let’s discuss it in details!!

My first point, which will be applicable for all the FD investor is the TDS limit. The traditional bank fixed deposit is now getting a makeover and its credit goes to Interim Budget 2019, wherein the TDS limit has been proposed to be hiked from Rs.10000 to Rs.40000 a year.

My second point will tell you about ‘FD Life’. It offers investors, who are 18-50 years of age, the dual benefit of investment growth via FD and security through a free term life insurance of one year for the FD holder. It offers you the benefit of a free term life insurance from ICICI Prudential Life Insurance Company of Rs. 3 lakh on opening an FD of at least Rs. 3 lakh for a minimum tenure of two years. In addition to getting a competitive interest rate, the customer gets a complimentary insurance cover for one year. The customer has the option to renew it next year. For more information watch the video:

My third point will tell you about the ‘FD Invest’, which will help investors to invest the interest earned on FDs in monthly Systematic Investment Plans (SIPs) of a mutual fund of their choice from ICICI Prudential Asset Management Company. Available with a FD of at least Rs 2 lakh for a minimum tenure of one year, ‘FD Invest’ safeguards principal amount. At the same time, it offers an opportunity to investors to invest in mutual fund through the interest generated by the FD. For more clarity, check the below illustration:

Important: At present according to my comparative study, FD interest rate on ICICI Bank for the duration of 2-3 years is 7.5% per annum. But, to increase the return you can take more risk, you can choose equity linked mutual funds through ‘FD Invest’ option. In the past, people have received more than 15% CAGR by investing in various mutual fund schemes. But one thing you should keep in mind that your MF investment horizon should be big like 15 years, 25 years etc. In short the combination of both is important for good consistent returns in long run.

My fourth point will tell you about the ‘FD Income’.  Which is available in the form of FDs and RDs, they offer investors the flexibility of receiving their maturity proceeds in the way that suits their goals. Recurring Deposit also helps you to inculcate the habit of regular savings. Investors can choose to receive the entire maturity amount as a monthly income for the tenure of their own choice. Alternatively, they can choose to receive 30% of the amount as lump sum on maturity of the investment and the remaining 70% as a monthly income for the tenure of their choice. Maximum tenure for all term deposits, including investment phase and payout phase, is 10 years. For more understanding, watch the video:

My fifth and last point is instant platinum credit card, in which you can get credit against FD without any joining or annual fees.

Should you invest in a “FD Xtra”

After analyzing the facts, I would suggest you invest in them, because the interest rate on FDs are higher than that on savings account. During emergencies, you can use credit facility available against your FD. If you invest your money in a fixed deposit account, you will get an assured return. You will earn interest on your deposited amount, but the rate of interest depends on the tenure you have chosen. Financial instruments such as mutual funds, gold, shares etc., may provide high returns, but are also risky. To manage this kind of risk, it becomes very important to invest in debt instruments. It is a very safe form of investment where returns are guaranteed. Fixed deposit investments can be made for different tenures. For instance, if you have Rs.5 lakh, split the amount in five deposits of Rs.1 lakh each for one, two, three, four and five years. When the one year deposit is matured, reinvest it for a different tenure depending on new interest rates. This will balance out the highs and lows in the interest over a period of time. It will also ensure liquidity as you have deposits maturing at different times. Make sure that you choose the right tenure as you also have to consider the lock-in period and if you are withdrawing the amount before its tenure, then the returns are lower. I would also suggest investors, when you look at investments, invest with a longer time frame. You benefit from compounding, where the maturity is higher over a period of say 7 to 10 years, as compared to 1 or 2 years.

To apply for ‘FD Xtra’ deposits, customers can avail more details here or visit their nearest ICICI Bank branch. Additionally, they can apply for ‘FD Income’ through internet banking. To know more on latest FD Interest rates, visit  

Few days back, I have also opened a The One Saving Account with ICICI Bank and started availing the feature of Privilege banking, which is amazing. The minimum monthly average balance is Rs.100,000 and you will get a lot of benefits like Personal Banker, Discount on purchases at BigBasket, Free Health Check-up at SRL Diagnostics, Brokerage Waiver up to Rs.22,500 on DMAT Account etc.

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