MythBuster: Do You Need to Have a Savings Account to Open an FD?
May 26, 2025
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?
Yes, you need to have a Savings Account to fund your deposit. However, you don't need to open a new Savings or Bank Account with the bank to open a Fixed Deposit. Any existing bank account with the same or different bank is enough to open a standalone FD.
Banks like Ujjivan SFB allow individuals to open a Fixed Deposit without opening a new savings account. For example, with Ujjivan Small Finance Bank, you can open a standalone Digital Fixed Deposit. That said, it's always good to have a Savings Account with the same bank where you plan to open an FD for ease of transactions.
For Digital FDs, you can fund the deposit online. Once matured, the FD amount can be credited back to the linked bank account.
So, Why Do People Think a Savings Account is Mandatory?
There are two main reasons:
- 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.
- 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:
Final Thoughts
To sum it up, no — opening a new bank account is not a mandatory requirement to open Digital FDs. You can invest or open a standalone fixed deposit. However, having a savings account with the same bank adds convenience and unlocks additional benefits that can make your FD experience smoother and more rewarding.
So, while the myth is officially busted, choosing whether or not to link your savings account comes down to what works best for your needs.
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