Fixed Deposits (FD) are a traditional investment option that is considered safe and secure when compared to other investments. In the realm of financial stability, FDs have emerged as a reliable choice for investors seeking a secure and predictable return on their capital. Keeping the popularity of FDs in mind, banks and financial institutions started offering a fixed deposit double scheme.
In the fixed deposit double scheme, investors are required to deposit a particular sum of money for a fixed period. At the end of the deposit tenure, the interest earned in the deposit would eventually double the money.
In this article, learn about the FD double scheme, its eligibility criteria, advantages, list of banks offering it and how it is different from a regular fixed deposit scheme.
What is the FD Double Scheme?
The FD Double Scheme is an investment scheme offered by certain banks and financial institutions where the invested amount doubles over a predefined period. In this scheme, the principal amount is compounded at a specified interest rate, leading to a doubling of the initial investment. Investors opt for this scheme to capitalise on the power of compounding, allowing their money to grow significantly over time.
For example, let’s consider Mr A invested ₹50,000 in an FD Double Scheme with an annual interest rate of 8% for a tenure of 8 years. At the end of the tenure, i.e., after 8 years, Mr A would get ₹1,00,000.
This money double scheme can be an attractive option for those seeking substantial returns and the security of a fixed deposit, offering a clear pathway to doubling their investment within the stipulated time frame. The tenure for the scheme typically ranges from 5 to 10 years. Also, the interest rate varies with each bank or financial institution offering the scheme.
Eligibility Criteria For the FD Double Scheme
There is an eligibility criterion for the fixed deposit double scheme in India, as follows:
- There is no age limit for this scheme.
- Individuals, businesses, joint-stock companies, clubs, etc., are eligible.
- Both single and joint accounts are eligible for the scheme.
Advantages of the FD Double Scheme
- Compounded growth: The scheme leverages compounding, allowing the invested amount to grow exponentially over time. This compounding effect accelerates wealth accumulation.
- Fixed returns: Investors benefit from the security of a fixed deposit and the potential for higher returns. The predetermined interest rate ensures a stable and predictable income stream.
- Capital appreciation: With the principal amount doubling within a specified period, investors experience capital appreciation, providing a clear financial goal and a tangible increase in wealth.
- Risk mitigation: Unlike market-linked investments, the FD Double Scheme offers a secure option with minimal risk, making it suitable for those prioritising capital protection.
- Long-term planning: This scheme is ideal for individuals with a long-term financial horizon, providing a disciplined approach to wealth-building and achieving financial goals.
List of Banks Offering FD Double Scheme in India
There are various banks and financial institutions in India that offer the FD double scheme. Here’s a list of a few banks where you can avail of the scheme.
- ICICI Bank
- State Bank of India (SBI)
- HDFC Bank
- Canara Bank
- Axis Bank
- Union Bank of India
- Punjab National Bank (PNB)
- Central Bank of India
- Punjab National Bank (PNB)
- Indian Bank
Fixed Deposit Double Scheme vs Normal Fixed Deposit Scheme
Here’s a table to understand the differences between a regular fixed deposit and a fixed deposit double scheme.
| Criteria | FD Double Scheme | Normal FD Scheme |
| Interest Rate | Fixed rate. It can be higher than a regular FD | Fixed and predetermined rate. |
| Maturity Period | Typically longer | Varies, i.e. can be short or long term. |
| Returns | Higher potential due to compounding | Fixed returns |
| Principal Growth | Doubles over a specified period | Principal remains the same |
| Flexibility | Usually less flexible with premature withdrawal | More flexibility, may allow premature withdrawal with penalties |
| Goal | Ideal for long-term wealth accumulation | Suitable for various financial goals, short or long term |
| Income Frequency | Interest compounded, maturity payout | Regular interest payouts, maturity payout |
Conclusion
Fixed Deposit Double Scheme can be an attractive avenue for investors seeking long-term wealth accumulation with the potential for doubled returns. While providing security and steady growth, it contrasts with the flexibility and predictable returns of a Normal Fixed Deposit Scheme. However, make sure to compare various banks and financial institutions before picking one. Check the interest rates, tenure and other terms and conditions involved in the scheme.
If you are looking for more investment options, open a Demat Account on Angel One today and get started with your investment journey.
Related Calculators:
| FD Calculator | Equitas Small Finance Bank FD Calculator |
| POST-OFFICE-FD Calculator | BOI FD Calculator |
| Indian Bank FD Calculator | DHFL FD Calculator |
FAQs
What is the taxation on the FD double scheme?
FD Double Scheme offers tax benefits under Section 80C of the IT Act, 1961. You can claim a tax deduction of up to ₹1.5 lakh on the investment made in this scheme. The interest earned on the FD Double Scheme is taxable as per the investor’s income tax slab. TDS is applicable if the interest exceeds a specified threshold.
Where can we get the FD double scheme?
You can find the fixed deposit double scheme in banks and financial institutions. Ensure to check the details like interest rate, tenure, and the reputation of the company before investing.
Is there any minimum and maximum deposit amount for the FD double scheme?
The minimum and maximum deposit amounts vary among institutions offering FD double schemes. It is advisable to check with the specific provider for their terms and conditions.
Can we renew the money double scheme?
Renewal options for FD double schemes depend on the terms set by the bank or the financial institution. Some may offer automatic renewal, while others require manual renewal at maturity.
Can I get a loan against the FD double scheme?
Many financial institutions allow loans against FDs, including FD Double Schemes. However, check with your bank for more details.
Is premature withdrawal allowed in the fixed deposit double in 5 years scheme?
Irrespective of the tenure, premature withdrawal depends on the terms and conditions of the bank or financial institution. However, it may come with certain charges or reduced interest rates.