MythBuster: Do You Need to Have a Savings Account to Open an FD?

Think you must have a savings account before opening a Fixed Deposit (FD)? You’re not alone. A large chunk of Indians believe that unless you’ve already got a savings account with a bank, there’s no way to park your money in an FD with them. This assumption, though widespread, is not entirely true.

Let’s uncover the truth behind this misconception and explore when you actually need a savings account for an FD — and when you don’t.

Do You Really Need a Savings Account to Open an FD?

Short answer: No, you don’t always need one.

Many banks like Ujjivan SFB and Non-Banking Financial Companies (NBFCs) in India allow individuals to open a Fixed Deposit without a savings account. For example, with Ujjivan Small Finance Bank, you can open a standalone Digital Fixed Deposit – no Savings Account required!

You can fund the deposit online. Once matured, the FD amount can be credited back to any bank account you nominate.

So, Why Do People Think a Savings Account is Mandatory?

There are two main reasons:

1. Online-only convenience: Most banks require you to log in via net banking or their mobile app to open an FD — and this requires an existing relationship, usually in the form of a savings account.
2. Bundled banking services: A linked savings account makes things smoother: automatic interest credit, maturity pay-outs, easy auto-renewals, etc. This has led many to assume it's a necessity, not just a convenience.

When is Having a Savings Account Beneficial for FD Investors?

While not mandatory, having a savings account with the same bank where you open an FD comes with multiple advantages:

• Seamless Online Booking

  You can instantly open and manage your FD through internet or mobile banking — no paperwork, no queues.

• Auto-Credit of Interest & Maturity Proceeds

  The interest earned and the final maturity amount get directly credited to your linked savings account, hassle-free.

• Easy Renewal & Withdrawal

  Having a savings account allows for automatic FD renewal or premature withdrawal directly into your account.