What is Fixed Deposit? Meaning & Types of Fixed deposits in India

Short Answer

A fixed deposit is quite a common investment option provided by banks to help boost our savings. You deposit certain sum of money with the bank and earn interest on it. However, there are many types of fixed deposits or FD's. To learn more, we have useful details provided it here.

Detailed Answer

Fixed deposits are very popular fixed return-low risk investment schemes wherein an investor fixes an amount for a said period of time. No doubt, Fixed deposit or FD has been a highly preferred choice amongst people of India. And, this trend is being followed since decades. Do you agree to it?

Each one of us or our parents or grandparents might be having an FD for sure. Since this has been regarded as a safe investing option giving fixed returns over the years.

Now, depending on the bank policy, a fixed deposit can be opened as:

  1. Cumulative Fixed Deposit (Paid at maturity)
  1. Non-Cumulative Fixed Deposit (interest paid on regular intervals)

Interest rate for fixed deposits depends on RBI policy and bank notification. It usually ranges from 6-8% p.a. (pre-tax return). This may be slightly higher for senior citizens.

Tax Saving Fixed deposit: In case the investment under this scheme for a period of 5 years and more, then the individual can claim tax exemption benefit under Section 80C up to Rs.1.5 Lac of Income Tax Act.

Recurring deposits are again fixed return-low risk investment schemes wherein an investor agrees to deposit decided sum of money on a monthly basis. This is very popular scheme in India wherein Indian families save some amount on monthly basis.

Tagged With: fixed depositfixed depositsfd meaningfd types
Categories: Investment
Comments (0)
Related FAQs

What is Fixed Deposit in Bank? Types & Features

A fixed deposit is one such financial instrument which will help you deposit a sum with a bank for a predetermined period of time and the bank pays an interest on that sum. In essence, it’s a way of lending money to a bank, the opposite of taking a loan. These are sometimes even referred to as bonds or term deposits.

What is difference between Fixed Deposit vs Mutual Fund? Meaning

Fixed Deposit (FD) are saving tools offered by banks to deposit lump sum amount for a fixed period of time on a higher interest rate than saving accounts. Mutual funds are investment products which pool money from numerous small investors to create a fund.

What is an Option Spread? Meaning, Types & Examples

Option Spreads are usually used to hedge a position and try to increase the chances to make money. By doing this we limit our profits but most importantly we minimize our losses that is the most important part in trading, which is to preserve our capital.

What are Short term Debt funds in India? Meaning & Features

Short Term Debt Mutual Funds provide a good alternative to traditional investment and income generating schemes. Often termed as highly liquid assets, short term funds are a common choice when it comes to planning your short-term investments.

What are Liquid Funds? Meaning & Details

Liquid funds, a type of mutual funds which invest in different money market instruments. The withdrawals from these funds are processed within 24 hours and that's why these are regarded as liquid assets. The fund manager gets flexibility to meet immediate redemption requests.

What are features of India Post Payments Bank (IPPB)? Branches

India Post Payments Bank or IPPB, a Government of India owned payment bank was launched on 1st September 2018 offering doorstep banking especially in rural areas of India. The features include 4% Internet on savings banks accounts, easy money deposit, withdrawals, doorstep banking facilities, micro-ATM facilities and much more.

Which is best Monthly Income Plan for Senior Citizen in India?

Several monthly income plans available such as senior citizen fixed deposit, senior citizen savings scheme, post office monthly income scheme, tax-free bonds, debt funds, and many more are the best monthly income place for senior citizens in India.

What are best investment options for salaried person in India?

For a salaried class, there are many places where investments done. Know the best investment options for salaried person in India. The best investment options for a salaried person are Gold investments, PPF account, national pension scheme, ELSS, and fixed deposits.

What is need and importance of Demat Account in India?

The stock market has seen significant changes since the introduction of demat accounts. Demat refers to “Dematerialization” of shares. Know the meaning, need and importance of Demat Account in India. Simply speaking, Demat account allows you to store securities in electronic form.

How is Investar India Software for Technical Analysis?

Investar India claims it to be an India based Stock Market Software, which offers various crucial functionalities such as Fundamental Analysis, Technical Analysis, Portfolio Management, and so on.