A fixed deposit is an investment scheme offered by both financial institutions and non-financial institutions. Mutual funds (FDs) provide superior returns on the initial investment in comparison to the returns derived from a conventional savings account.
The tenure of fixed deposits is fixed, hence the name. The duration of a consumer’s FD investments may be short-term or long-term, contingent upon the composition of their investment portfolio. Variable interest rates are applicable to fixed deposits at different financial institutions.
Investors in fixed deposits must bear in mind, nevertheless, that premature withdrawals prior to maturity will result in adverse financial consequences. After penalty payment, early withdrawal is permissible in the event of an emergency.
