Fixed Deposit

So, what exactly is a Fixed Deposit? In a Fixed Deposit, you put a lump sum in your bank for a fixed tenure at an agreed rate of interest. At the end of the tenure, you receive the amount you have invested plus compound interest. FDs are also called term deposits.

The top six benefits of a fixed deposit include a high-interest rate, guaranteed returns, tax benefits, flexible tenure, it is a one-time investment, and you can take a loan against an FD.

Unlike market-dependent investment options like a mutual fund, SIP and stock, a fixed deposit is safe. An FD is not dependent on market growth; hence the interest rates do not fluctuate and remain stable throughout the fixed deposit tenure.