What is a Fixed Deposit (FD)?
Definition and Basics of FD
A Fixed Deposit (FD) is a financial instrument provided by banks and financial institutions that allows you to invest a lump sum of money for a fixed tenure at a predetermined interest rate. The rate of return is guaranteed, making FDs one of the safest investment options.
How Does an FD Work?
When you invest in an FD, the bank holds your money for a set period. During this time, the bank pays interest at a fixed rate, which is agreed upon when you open the deposit. At the end of the tenure, you receive your initial investment plus the accumulated interest.