Fixed Deposit

FD is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. They are considered to be very safe investments.

Term deposits in India is used to denote a larger class of investments with varying levels of liquidity. The defining criteria for a fixed deposit is that the money cannot be withdrawn from the FD as compared to a recurring deposit or a demand deposit before maturity.

Some banks may offer additional services to FD holders such as loans against FD certificates at competitive interest rates. It’s important to note that banks may offer lesser interest rates under uncertain economic conditions. The interest rate varies between Bank to Bank and depends on tenure. The tenure of an FD can vary from 7, 15 or 45 days to 1.5 years and can be as high as 10 years.

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