What is a Fixed Deposit ?
A fixed deposit (FD) is a financial instrument offered by banks and financial institutions where an individual deposits a certain sum of money for a fixed period at a predetermined interest rate. The interest rate offered on fixed deposits is generally higher than that offered on savings accounts, and the rate is determined by factors such as the duration of the deposit and prevailing market conditions.
Features of fixed deposit:
- Fixed Tenure
- Fixed Interest Rate
- Interest Payment
- Safety
- Liquidity