What is Fixed Deposit (FD)?
Fixed Deposit (FD) is a savings option where you invest a lump sum amount in a bank for a fixed period.
You earn a fixed interest on your deposit.
Example (Simple Understanding)
If you deposit ₹50,000 in FD for 2 years, you will receive fixed interest along with your principal amount at maturity.
How FD Works
- Deposit one-time amount
- Select tenure (7 days to 10 years)
- Bank offers fixed interest rate
- Maturity amount = principal + interest
Benefits of FD
- Safe investment
- Guaranteed returns
- No market risk
- Flexible tenure options
FD vs RD
- FD → One-time deposit
- RD → Monthly deposit
- FD requires lump sum
- RD builds savings gradually
Learn RD:
What is Recurring Deposit
FD and Interest
Interest is fixed in FD.
Learn here:
How Bank Interest Works
Who Should Invest in FD?
- Risk-averse investors
- People with lump sum money
- Short-term savers
Frequently Asked Questions (FAQ)
Is FD safe?
Yes, FD is considered one of the safest investments.
What is minimum FD amount?
It depends on bank, usually starts from ₹1,000.
Can I break FD early?
Yes, but with penalty.
Is FD better than SIP?
FD is safe but SIP gives higher returns in long term.
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