In Fixed Deposit Account (also known as FD Account), a particular sum of money is deposited in a bank for specific period of time. It’s one time deposit and one time take away (withdraw) account. The money deposited in this account can not be withdrawn before the expiry of period.
However, in case of need, the depositor can ask for closing the fixed deposit prematurely by paying a penalty. The penalty amount varies with banks.
A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposit vary according to amount, period and also from bank to bank.
Benefits of Fixed Deposit Account
- The investment made in an FD is locked for a fixed time-period and helps develop a habit of saving.
- FD is a secure investment and yields assured returns for your investment.
- Better returns than savings accounts
- You can withdraw the money invested in a Fixed Deposit even before the maturity date by paying a nominal penalty charge.
- Interest can be paid out at maturity, annually or monthly basis depending on the term you choose.
- You can enjoy the benefit of flexible tenure options. You can invest your money for a time period ranging from 7 days to 10 years.