A Fixed Deposit (FD) is a type of investment offered by banks where you deposit a lump sum amount for a fixed tenure at a predetermined interest rate. The interest rate on FDs is typically higher than regular savings accounts, making them an attractive option for individuals looking for secure and stable returns on their investments. The tenure of an FD can range from a few months to several years, and the interest earned is usually paid out at regular intervals or at the end of the term, depending on the type of FD selected.

One of the key benefits of Fixed Deposits is the safety they provide, as they are backed by the bank, and the returns are not subject to market fluctuations. FDs also offer tax benefits under certain schemes, such as tax-saving FDs. However, premature withdrawal of an FD usually comes with a penalty, and the interest earned may be subject to taxation. With the option of renewing or reinvesting after maturity, Fixed Deposits are a popular choice for individuals looking for a reliable and low-risk investment opportunity.