What is Term Deposit and Fixed Deposit?
This one is interesting. I have come across many people who confuse term deposit with fixed deposit and vice versa. But, breaking news, it’s not the same thing. Yes, they are both safe ways to grow your money but they are NOT THE SAME.
Broadly speaking, a term deposit is a category of deposit accounts where you invest a certain amount of money for a fixed period. During this period, you cannot withdraw the funds and if you do, you will have to pay a penalty. So it is the bank rewarding you with interest for keeping your deposit locked and untouched.
Many people don’t know, a fixed deposit is a type of term deposit. When you open an FD, you deposit a lump sum for a specific tenure, ranging from a few days to several years. FDs offer stable and predictable returns with fixed interest rates decided at the time of investment.
So, is term deposit and fixed deposit same? Term deposit includes FD and RD.
Nonetheless, if you are saving for a short-term goal or just want to put your money safely then term deposits like fixed deposits and recurring deposits are safe and predictable options to earn interest.