How Does a Fixed Deposit Help During a Financial Emergency?

Summary: Financial emergencies are, by their nature, unpredictable. This is why having back up funds in a reliable form like a fixed deposit account helps many people sleep better at night.

Many new investors turn to open an FD when embarking on their investment journey. This popular investment option is known for its safety and relatively high interest rates. In times of financial crisis, such assurances can significantly ease the mind and simplify financial planning. Such benefits make this a go-to investment choice by many. 

Fixed deposit accounts also serve to diversify the portfolio of seasoned investors. While not earning returns as high as the stock market, these are stable investments that qualify for asset allocation. They help mitigate risk, balancing more volatile investments with their stability. Therefore, they are ready and on-hand liquidity should you find yourself in a crisis.

Understanding the Benefits of FDs in a Financial Crisis

COVID-19 was a crisis in itself, revealing the thin financial fabric binding the economy together. While a large percentage of the Indian population does not turn to investments, those with FDs found themselves significantly better off. They could meet and combat these unpredicted circumstances and ward off the ill effects of the crisis COVID-19 brought. 

FDs helped people weather the storm that was a global pandemic through several measures.


As mentioned earlier, FDs are popular for the safety they offer. We all watched the stock market plummet with the onset of COVID-19 in 2020. However, FDs are much more secure, with unwavering interest rates and regular payouts. Depending on the scheme you choose, the minimum amount for an FD can be as low as Rs. 10,000. 

This pocket-friendly investment with guaranteed returns not subject to market fluctuations makes this an excellent option in crises. If you are a young investor, opening an FD can also help cultivate a habit of investing that pays off as you grow older. 

Various Tenures

FDs help you better financially plan with maturity periods ranging up to 10 years. Usually, longer tenures mean higher FD interest rates and a greater payout. Therefore, planning your financial future and keeping aside an FD for a considerable tenure is highly recommended. 

Premature Withdrawals

By their nature, we do not see financial crises coming. Luckily, many banks offer flexibility with withdrawing your FD beforehand. While penalty charges usually apply, they can be as low as 1%, ensuring you have access to your funds as soon as necessary.

Deposit Insurance

Financial institutions understand the trust you place in them when you invest in an FD. They honour this by offering insurance against your deposit. The Deposit Insurance and Credit Guarantee Corporation (DICGC) mandates that all deposits be insured up to Rs. 5 lakhs, therefore guaranteeing further security to the owner.

Today, you can open an FD from the comfort of your own home! The online options offered by banks allow you to circumvent any paperwork and long queues and processes. Such convenience alongside the visible ability to provide stability in uncertain times makes it a must-have for everyone. Whether you are a first-time investor or a veteran looking to diversify, this secure option can mean the difference between proper financial stability and complete financial distress.

Documents Required for Individual Fixed Deposit

Following are the documents required for opening an individual fixed deposit with PNB Housing Finance Limited:

  • One latest passport size photograph
  • Self- attested copy of PAN card
  • Self-attested copy of proof of address such as Aadhar card, Voter ID card etc.

Documents Required for Non-Individual Fixed deposit

Various types of organizations can open a non-individual fixed deposit with PNB Housing Finance Limited, such as:

  • Trusts, Associations and Clubs
  • Public/Private Ltd. Company, Co-operative Societies, Co-operative Banks
  • Partnership Firm

Following are the documents required for non-individual fixed deposit:

  1. Trusts/Associations/Clubs:
    • Trust Deed
    • Registration Certificate
    • Copy of Resolution of Investment
    • Trust’s PAN Card Copy
    • Trust’s Address Proof
    • Specimen signatures of authorized persons
    • Photograph, PAN Card, address proof of signing authorities
  2. Public/Private Ltd. Company, Co-operative Societies, Co-operative Banks:
    • Copy of Memorandum & Articles of Association/Bye-laws
    • Copy of Resolution of Investment
    • Specimen signatures of authorized persons
    • Photograph, PAN Card, address proof of signing authorities
  3. Partnership Firm:
    • Declaration of partnership by partners
    • Name and address of partners
    • Specimen signatures
    • PAN Card copy of the firm

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