Fixed Deposit (FD)
Money locked with a bank for fixed returns.
What does it mean? (Simple)
A Fixed Deposit is one of the simplest ways to save money in India. You give your money to a bank for a fixed period (like 1 year or 5 years), and the bank gives you guaranteed interest in return.
The interest rate is decided when you open the FD and doesn't change, even if market rates go up or down. This makes FDs very predictable and safe.
Most banks in India offer FDs. You can open one online through your bank's app or by visiting a branch. The minimum amount varies but is usually ₹1,000 to ₹10,000.
Example with ₹ numbers
You deposit ₹1,00,000 in a 1-year FD at 7% interest. After 1 year, you get back ₹1,07,000 (before tax on interest).
Common mistakes to avoid
- ⚠️Breaking FD early and paying penalty
- ⚠️Not comparing rates across banks
- ⚠️Ignoring tax on FD interest
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⚠️ Educational only: This explanation is for learning purposes. Please consult a financial advisor for personalized advice.