In a Fixed Deposit Account, a certain sum of money is deposited in the bank for a specified time period with a fixed rate of interest. The rate of interest for Bank Fixed Deposits depends on the maturity period. It is higher in case of longer maturity period.
Bank Fixed Deposits are also known as Term Deposits.
The interest can be calculated quarterly, half-yearly, or annually, which varies from bank to bank. They are one the most common savings avenue, and account for a substantial portion of an average investor’s savings.
Note: For senior citizen the rate of interest is 1% more then normal interest (In case of Bank FD).
Advantages:
- It is the safest investment and you can avail 75% to 90% loan against your FD (with 2% increase in interested rate) without many formalities. It can be repaid in period you desire.
- It is totally risk free provided FD is with nationalised bank or well repute bank.
Disadvantages:
- Growth in your investment very low/slow.
