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Top 6 Benefits of Opening a Digital Fixed Deposit

May 01, 2025

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Gone are the days when opening a Fixed Deposit (FD) meant long queues, endless paperwork, and frequent bank visits. In today's fast-paced digital world, banking has evolved, making financial investments simpler and more rewarding. Enter Digital Fixed Deposits (Digital FDs)—a smarter, more convenient, and more lucrative way to grow your savings. With higher interest rates, instant online setup, and zero paperwork, Digital FDs offer everything you love about traditional FDs but with added ease and efficiency.

Whether you're a seasoned investor or a first-time saver, Digital FDs provide a seamless and secure way to lock in attractive returns with minimal hassle. Let’s explore why Digital FDs are becoming the go-to investment option and how they differ from traditional FDs.

Key Benefits of Digital Fixed Deposits

1. Higher Interest Rates

Many banks and financial institutions offer higher interest rates on Digital FDs. For example, Ujjivan Small Finance Bank offers interest rates up to 8.05%* p.a. (data as on 24 April 2025) on Digital Fixed Deposit subject to terms and conditions. Senior citizens are eligible for an additional 0.5%* interest rate.

2. 100% Paperless Process

One of the biggest advantages of Digital FDs is the complete elimination of paperwork. Unlike regular FDs that may require in-person verification and multiple forms, Digital FDs can be opened online within minutes using a fully digital process.

3. Hassle-Free Video KYC – Only PAN & Aadhaar Required

With Video KYC (Know Your Customer), opening a Digital FD is now faster and simpler. You only need your PAN card and Aadhaar card for KYC verification, making it a seamless experience without needing to visit a bank branch. Basically, all you need is a smartphone or laptop and a stable internet connection to complete your video KYC.

4. Open a Standalone FD – No Need for a Savings Account

Unlike traditional FDs that often require you to hold a savings account with the same bank, Digital FDs can be opened as standalone accounts. This flexibility allows you to invest in the best FD schemes without being tied to a specific bank.

5. Instant Account Opening and Confirmation

Digital FDs can be set up in just a few clicks. Once the Video KYC is completed, your FD account is instantly created, and you receive immediate confirmation via email or SMS.

6. Flexible Tenure and Auto-Renewal Options

Digital FDs come with customizable tenure options, ranging from 7 to 10 years. Additionally, you can set up auto-renewal to ensure uninterrupted compounding of your investment.

Difference Between Regular FD and Digital FD

Feature	Regular Fixed Deposit	Digital Fixed Deposit
Interest Rates	Higher rates	Higher rates
Application Process	Paper-based, requires physical documents	100% paperless, online application
KYC Process	In-person verification	Video KYC using PAN & Aadhaar
Savings Account Requirement	Often mandatory	Not required
Processing Time	A few days	Instant processing
Auto-Renewal	Needs branch visit or manual request	Online auto-renewal available
Convenience	Limited to banking hours	24x7 availability

Final Thoughts

Digital Fixed Deposits offer a modern, hassle-free way to invest while ensuring higher returns and greater flexibility. With a seamless online process, minimal documentation, and competitive interest rates, Digital FDs are an excellent choice for those looking to grow their savings securely and efficiently.

Looking to grow your savings faster? Ujjivan SFB offers a wide range of fixed deposit products. Select the FD of your choice and take a step forward to your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.

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FAQs

1. How is a Digital FD different from a regular FD?

A Digital FD is opened online without paperwork, whereas a regular FD requires a branch visit. Additionally, Digital FDs often provide better interest rates and don’t require a savings account.

2. What documents are required to open a Digital FD?

You only need your PAN card and Aadhaar card for Video KYC. No additional documents or physical paperwork are required.

3. Can I open a Digital FD without a savings account?

Yes, many banks allow you to open a standalone Digital FD without needing a savings account with them.

4. How long does it take to open a Digital FD?

With Video KYC, a Digital FD can be opened within minutes. Once the verification is complete, your FD is instantly created.

5. Is my money safe in a Digital FD?

Yes, Digital FDs are offered by banks and NBFCs regulated by the RBI, making them a secure investment option.

6. Can I withdraw my Digital FD prematurely?

Yes, most banks allow premature withdrawal, but it may be subject to a small penalty as per the bank’s terms. Ujjivan doesn’t charge any fee for withdrawals made after 6 months from the time of deposit.

7. What are the tenure options for a Digital FD?

Digital FDs come with flexible tenure options, typically ranging from 7 days to 10 years.

8. How do I renew or close my Digital FD?

You can renew or close your Digital FD through internet banking or mobile banking without visiting a branch.

10. Can I avail a loan against my Digital FD?

Yes, most banks offer loans or overdrafts against Digital FDs, usually up to 90% of the FD amount, depending on bank policies.

Disclaimer

Top 6 Benefits of Opening a Digital Fixed Deposit