Fixed Deposit Meaning

In deposit terminology, the term Fixed Deposit refers to a savings account or certificate of deposit that pays a fixed rate of interest until a given maturity date. Funds placed in a Fixed Deposit usually cannot be withdrawn prior to maturity or they can perhaps only be withdrawn with advanced notice and/or by having a penalty assessed.

Types of Companies offering Fixed Deposits

• Financial Institutions
• Non-Banking Finance Companies (NBFCs).
• Manufacturing Companies
• Housing Finance Companies
• Government Companies

Benefits of Fixed Deposite

• Company Fixed Deposits offer comparatively higher returns than banks.
• Investors can rest assured that his investments are safe and he will be getting back a guaranteed amount at the end of the tenure.
• The amount that is invested in fixed deposit can be withdrawn at any time for a small penalty. The investor may have a financial emergency to meet financial needs.
• Interest is payable at maturity; annually or monthly depending on the term you chose or you could use the money to buy assets if you want.
• Investing in a fixed deposit account earns you a higher interest rate than depositing your money in a savings account.
• Company Fixed Deposits are non-transferable that means there is no fear of FD receipt being stolen. In case it falls into wrong hands, it cannot be misused.