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The future of fixed deposits: Trends and innovations in banking

Summary: Banks and financial institutions can offer personalised FDs in the future, which will be based on the individual’s risk appetite and investment horizon.

14 Jun 2024 by IDFC FIRST Bank
Fixed Deposit Trends
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Fixed deposit accounts are popular investment vehicles in India. As of July 2023, according to data published by the Reserve Bank of India, Indians have saved over ₹103 trillion in 24.23 million fixed deposit accounts in India. This article elaborates on how changing trends in the banking and finance industry will affect the fixed deposit accounts of the future. 

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8 fixed deposit trends that customers must know about
 

1. Banks are offering more online FD accounts to customers: Thanks to the digital transformation of the banking and finance sector, customers can now access banking services more conveniently. Banks are now offering online FD accounts to customers that are easily accessible and can be opened through a digital, paperless process. IDFC FIRST Bank has recently launched a unique fixed deposit solution for its new customers. It is a standalone fixed deposit that customers can open without having an IDFC FIRST Bank savings account. These fixed deposits will be Aadhaar OTP-based, which means that customers would be able to open this FD in just a few minutes.

2. FD benefits are getting personalised: Banks are looking to personalise the fixed deposit benefits for their customers to meet their unique requirements. Customers will soon be able to access FD accounts that cater to their risk appetite and investment horizon. These personalised FD accounts can include features like variable interest rates and additional loyalty rewards. Going ahead, banks and financial institutions can also offer customers the choice of choosing specific sectors of investment.

3.   Banks and financial institutions are offering ESG-focused FDs: Banks are offering green fixed deposits to issue loans that support Environmental, Social, and Governance (ESG) projects. These fixed deposit schemes invest their corpus in eco-friendly initiatives like green transportation, renewable energy, and waste management. As customers look to make choices based on the impact these would have on the environment, banks will look to make their FDs more ESG-focused. Investors who prioritise eco-friendly companies and industries in their FD investments will be incentivised by banks. IDFC FIRST Bank also has plans of offering Green Deposits in the near future.

4. FDs could be integrated with other banking services going ahead: Banks are also looking to integrate FDs with other banking products, thereby converting it to a bundled service. These hybrid FDs could be combined with investment and insurance-related products to help customers get the best of both worlds. Hybrid FDs could prove to be a comprehensive financial solution for customers who would want one product to achieve most of their financial objectives.

5. Customers can expect the intervention of AI in offering personalised FD recommendations: In an age where the presence of AI is felt in almost every sector, banks are looking to integrate AI in their products and services to make them more efficient. AI-enabled tools can help banks offer automated alerts and recommendations to customers regarding their online FD accounts. Banks are already integrating AI in their customer services to help customers resolve their queries faster.

6. Future FDs can offer higher access and liquidity: Fixed deposit accounts, especially the tax-saving kind, are known for long lock-in periods. Banks could change this feature going ahead and offer higher liquidity through their instant FD accounts. This arrangement would allow a customer to withdraw a portion of their FD account without prematurely closing the FD. This feature would not interrupt the customers investment and will also help them benefit from the tax advantages upon maturity.

To make the most of their FD investment, investors must use an online FD returns calculator to calculate their overall returns on maturity. Doing so can help them plan for their other investments and decide on the right investment tenure and amount.

 

 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.

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