A Floating Rate Fixed Deposit (or floating-rate FD / FRTD) is like a regular fixed deposit in which the interest rate varies according to a benchmark rate rather than being fixed for the duration. You deposit a lump sum for a certain tenure, but with a key difference: the interest rate is not locked in.
Basically, the rate fluctuates periodically, being reset at fixed intervals based on an agreed benchmark (such as the yield on short-term Treasury bills or central bank reference rates).
On opening a floating-rate FD, you accept that the interest rate will adjust over time instead of staying fixed.
Many banks tie the rate to benchmarks such as the yield on 91-day treasury bills (or similar). The bank typically resets the rate every quarter (for example, on April 1, July 1, October 1, January 1) to reflect current benchmark yields.
On rate reset dates, your deposit’s interest rate may go up or down depending on the benchmark trend. This affects future interest payouts.
When benchmark rates or overall interest rates rise, your floating FD rate also goes up. It gives higher returns than a regular FD booked earlier at a lower rate.
As rates adjust, floating FDs can help preserve the real value of your money when interest rates (often in response to inflation) rise.
Unlike a regular FD where you know exactly what you’ll get at maturity, floating FDs make future returns uncertain, which may not suit people needing a guaranteed outcome.
Many floating-rate FDs allow quarterly interest payouts, regular withdrawal (subject to bank rules), and even loans or overdrafts against the deposit (often up to a percentage of deposit value). This is all about what is floating fixed deposit.
Choose NB InstaCash to Get Instant Disbursal of Personal Loan of Up to 10 Lakhs in Your Account!
Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
What Is Floating Rate Fixed Deposit?
akash
28 Views
1
27 days
2025-11-28T16:15:24+00:00 2025-11-28T16:15:26+00:00Comment
Share