Fixed Deposit

Fixed Deposit aka term deposit is an instrument by which one can deposit his/her savings for a prescribed period of time with a bank. When the period of deposit elapses, the depositor is entitled to the interest on the deposited amount. In some cases, the rate of interest on fixed deposits can be as high as 9.5%!

How to do it?

All you got to do is deposit your savings in a bank account of your preference and watch your money grow over time. Do remember to check with multiple sources regarding the various options available. There are a wide range of fixed deposit products available to suit a wide range of investor preferences. So choose the one that matches closely with your investment goals.

The Bankers View:

For banks, fixed deposits (or term deposits) represent a loan arrangement. In simple terms, the money deposited through such investments shall earn a said amount as interest, as per the existing norms and guidelines as set by the banking regulatory authority. The rate of interest on your fixed deposit is determined by many factors such as the location of deposit, the duration for which the amount is deposited as also the currency involved for making the deposit.

The Investors Take:

For starters, a fixed deposit is not a normal deposit that you do at your bank and then withdraw it as and when you please. But, it is a deposit that cannot be withdrawn in the specified period. Generally, these types of deposits are made for duration of 5 years. During this time, the amount remains in your bank account and is prohibited to be withdrawn for any reason whatsoever. Non-profit organizations, corporate entities and individuals alike, who wish to keep aside a stipulated sum for a particular period of time, most often than not, find that such deposits are the easiest way in attaining their objective. The icing on the cake is their money will earn a rate of interest that is shielded by any fluctuations in the interest rates that governs other type of investments. Such deposits are a good (if not the best) way to gain a return on investment which is a tad higher than a conventional savings account.

Trust Deposits:

Deposits that are made "in the name of one person, as trustee for another" are branded as "trust deposits."

Trust deposits are made for three basic reasons:

  • Pose for the disposition of a domain after demise sans the use of a will or administration,
  • Hide from others info of financial standing, or
  • Escalate deposits where a prescribed limit is set upon single deposits.


Lastly, fixed deposits offer investors a relatively safe avenue for parking their funds, albeit at the risk of earning a slightly lower return on investment. At the end of the day, it is up-to the individual investor to decide for themselves whether they wish to pursue a high return-high risk approach or a relatively lower but largely safe investment approach.


Types of Companies offering Fixed Deposits

  •   Financial Institutions
  •   Non-Banking Finance Companies (NBFCs).
  •   Manufacturing Companies
  •   Housing Finance Companies
  •   Government Companies


Features and Benefits

  •    Company Fixed Deposits offer comparatively higher returns than banks.
  •    Choose the best tenure for you from a wide range as per your convenience.


You can choose how frequently you want to receive your interest payments :-

  •    Maturity
  •    Yearly
  •    Half-yearly
  •    Quarterly
  •    Monthly


Company Fixed Deposits are non transferable that means there is no fear of FD receipt being stolen. In case it falls into wrong hands, it cannot be misused.

Premature encashment of deposit is available any time subject to payment of prescribed penalty.

Diversify Risk - The deposits should be spread over a large number of companies engaged in different industries. This way, youll be able to diversify your risk among various industries/companies.

Wide Choices- Many companies operating in the Company Deposit market. This will help you decide whether to renew or reshuffle the deposit.

Attractive rates as applicable from time to time.


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