What is a Fixed Deposit?

A Fixed Deposit (FD) is an investment in which you deposit a lump-sum amount with a bank or financial institution for a selected tenure at a fixed interest rate. At maturity, you receive your original deposit along with the interest earned.

Benefits

✓ Predictable maturity value
✓ Flexible investment tenure
✓ Easy calculation of expected returns
✓ Compare different interest rates
✓ Useful for short- and medium-term goals

Quick Tip

Compare the effective annual return, compounding frequency, premature withdrawal penalty and tax treatment before choosing a Fixed Deposit.