A Fixed Deposit (FD) locks your money with a bank for a predetermined period (7 days to 10 years) at a guaranteed interest rate. It's one of the safest investment options in India.
Key Features
- Guaranteed returns — not affected by market fluctuations
- Higher interest rate than regular savings accounts
- TDS (Tax Deducted at Source) applies if interest exceeds ₹40,000/year
Premature Withdrawal
You can withdraw early, but typically face a 0.5%–1% penalty on the interest rate. Some banks offer sweep-in FDs that automatically break portions as needed.