About Fixed Deposit

Fixed Deposits are one of the best investment avenues for those looking for an assured return. A Fixed Deposit is a type of an account opened with a bank where an assured rate of interest is paid for keeping the funds for a particular period. Fixed Deposits are an easy way to earn returns from funds that are lying idle.
But, how does Fixed Deposit work and why does the bank pay a higher rate of interest on these deposits? This handy guide will help you understand.

Types of Fixed Deposits

Normal Fixed Deposits

Deposit money for a fixed tenure.

Tenure can range from 7 days to 10 years.

Interest rates higher than a normal savings account.

Senior Citizens’ Fixed Deposits

Applicable for individuals above 60 years of age.

Senior citizens are eligible for special rates.

Flexible tenures.

Tax-Saving Fixed Deposits

Tax exemption on the principal deposit amount of up to Rs.1.5 lakh in a calendar year.

Lock-in period of 5 years within which you cannot withdraw the amount.

Allows only one-time lumpsum deposit.

Flexi Fixed Deposits

Fixed deposit linked to your bank account.

Money shuttles between your FD and savings account.