So what are Flexi Deposits?
Flexi Deposits are a special kind of fixed deposits offered by various banks in the UAE. It is basically a combination of demand deposit and fixed deposit. The depositor can enjoy the liquidity of savings and current account and the high returns of fixed deposits. This is an ideal option for those who have excess money that they will have after the sale of their vehicle or a property. Instead of keeping the money idle in the account or instead of keeping it locked in for a long period, you can link that money to fixed deposit through the flexi deposit and choose the time period for which you want the amount to be deposited. The interest is earned at the maturity and you will be eligible for the prevailing interest rates on the day of the deposit.
Features of Flexi Deposits
Flexi deposits have two main features that combine the benefits of fixed deposits and savings and current accounts:
- Auto sweep or Sweep-in facility:
- Reverse sweep or Sweep-out facility:
- The savings account and current account is linked to the fixed deposit.
- The linking is done for free by most of the providers.
- Banks allow you to take loan against the amount in the fixed deposit of the flexi deposit.
- You can choose the time period for the fixed deposit. The deposit can be renewed at the prevailing rate.
- You can get credit card of instant loan against the fixed deposit.
- You can access the account through internet banking, SMS banking and mobile banking.
- Interest period starts from 31 days to 366 days.
- The interest rates range from 5.25 percent to 7 percent. But, the rates may vary from banks to banks.
The excess balance of a specified savings amount is transferred to fixed deposit for a term of one year. This term is the default term and the excess of the fixed limit can earn substantial higher rate of return. Deposits formed through the auto sweep facility will carry interest rate on the fixed deposit of one year and the interest rate is set on the rate prevailing on the day of auto sweep.
If you have shortage in fund in your savings account, you can withdraw the money through cheque or through ATMs. The balance in the fixed deposit to the extent that you need can be withdrawn. The remaining balance in the fixed deposit will continue to earn interest rate at the applicable original interest rate.
Benefits of Flexi Deposits
The benefits of flexi deposits are as follows:
- You amount you save in the savings or the fixed deposit account can be accessed at any time.
- The excess money in your savings and current account gets transferred to the fixed deposit and you earn a higher rate of interest on that amount.
- The transfer is done automatically and it is hassle free.
Eligibility Criteria and Documents required to open a Flexi Deposit Account
You need to be 18 years and above to open a flexi deposit account. The documents that will be required to submit are:
- Your National Identity Card.
- Valid passport or a valid driving license.
- Billing proof not less than 3 months are to be submitted.
- Any other document from the bank for the KYC purpose.