Fixed Deposit
A financial instrument where you deposit a lump sum with a bank or NBFC for a fixed tenure at a guaranteed interest rate.
A Fixed Deposit (FD) is one of India's most popular savings instruments. You deposit money for a predetermined period — ranging from 7 days to 10 years — and the bank pays a fixed interest rate that doesn't change regardless of market conditions. FDs are offered by scheduled commercial banks, small finance banks, cooperative banks, post offices, and NBFCs. Bank FDs up to ₹5 lakh are insured by DICGC. The minimum deposit varies by bank (as low as ₹1,000 at SBI) with no maximum limit for most banks. You can choose between cumulative (interest at maturity) and non-cumulative (periodic interest payout) options. Premature withdrawal is allowed with a penalty, typically 0.50% to 1.00% rate reduction.