Fixed Deposit
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Fixed Deposit

Definition of Fixed Deposit

Fixed deposit, also known as a term deposit or time deposit, refers to financial product offered by banks and financial institutions where customers deposit a specific amount of money for a predetermined period at a fixed interest rate.

Fixed deposits have a specified maturity date, and the funds are locked during the agreed-upon tenure, making premature withdrawals subject to penalties.

This investment option is considered low-risk and offers a guaranteed return on the principal amount at the end of the deposit term, making it an attractive choice for individuals seeking stable and secure earnings on their savings.

What is Fixed Deposit?

A fixed deposit is a type of investment in which individuals or businesses deposit a lump sum amount with a financial institution for a predetermined period, usually ranging from a few months to several years.

The funds remain inaccessible during the fixed tenure, and in return, the financial institution pays interest on the deposit at a fixed rate agreed upon at the time of deposit placement.

Fixed deposits are considered conservative and low-risk investment options since the principal amount is guaranteed, and the interest rate remains constant throughout the deposit period.

These accounts are popular among individuals seeking to earn reliable returns on their savings while preserving the capital amount without exposure to market fluctuations.

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