I am new to investments. I want to know what is fixed deposit?
FD or Fixed Deposit is a type of term deposit offered by banks and NBFCs. In this investment scheme, you can put in a lump sum amount for up to 10 years and the bank will pay you interest on this deposit. You should know that this interest is based on the predetermined interest rate at the time of making the deposit.
Among many investment schemes, FD is considered one of the safest investments. It is less risky and not at all linked to the stock market.
Banks offer the option to draw monthly, quarterly or annual payouts as well. This becomes an attractive offering for those who are looking for a steady source of income, especially, like senior citizens.
In a diversified investment portfolio, fixed deposit is a good addition for a risk-averse, stress-free investment. You can earn up to 8.5% interest on fixed deposits these days.