Floating Rate Fixed Deposit

Floating rate term deposits (FRTDs) are a form of fixed deposit in which the FD interest rate is not fixed for the entire term of the deposit but shifts in lockstep with a reference rate that is reset on a regular basis. Floating FD allows you to benefit from interest rate fluctuations without having to close and re-book your Fixed Deposits.

As a result, Floating Rate Term Deposits are perfect for the financially savvy investor who isn't afraid to bet on the directionality of future interest rates and inflation. The rates offered by Floating FD are correlated with the Bank's Treasury Bill rates, which are auctioned every two weeks on the RBI website, and with a mark-up that will be reset once a year. The fixed deposit interest calculator is a tool that is useful when it comes to calculating the returns you will receive at maturity on your investment. All you have to do is enter the deposit amount, expected rate of interest and tenor.

• Interest Payment - Interest is paid on the Floating FD quarterly on the last day of each month.

• Interest Reset - Every three months, on April 1, July 1, October 1, and January 1 of each year, to coincide with calendar quarters.

• Liquidity - A loan or overdraft may be obtained against a Floating Rate Fixed Deposit. An overdraft/loan of up to 90% of the FRTD sum can be given at the discretion of the Branch Manager. The loan/overdraft would have an interest rate of 2.0 percent per annum above the deposit rate, with a discount of up to 1.0 percent as per the DoP for Floating FD.

• Nomination Service - This service is provided free of charge.

• Senior Citizen Benefit - Senior Citizens can receive interest at a rate that is 50 basis points higher than the applicable Floating Rate Term Deposit rate.

• Eligibility - Any person, singly or jointly minor (himself or through his/her guardian), Karta of HUF may open the account.

• Minimum and maximum amount - The minimum amount is Rs. 10,000/-, with subsequent amounts in multiples of Rs. 1,000/-. The maximum sum is less than one crore rupees.

• Interest Rate on Floating FD - Anchored to the average yield at RBI's 91-Day Treasury Bills Auctions held in the previous three months. Each calendar quarter, this will be reset.

• Confirmation of Floating Rate Term Deposit - Since the interest rate is variable and not set, unlike a traditional fixed deposit, it does not have a maturity value.

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.