Finance
What is A fixed deposit (FD)?
A fixed deposit (FD) is money you lock with a bank for a set period at a guaranteed interest rate. You can't touch it until it matures, and in return the bank pays you more interest than a regular savings account — a safe, predictable way to grow savings.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains a fixed deposit (fd).
Key things to understand
- 1Money locked with a bank for a fixed term.
- 2Pays a guaranteed, fixed interest rate.
- 3Higher interest than a savings account.
- 4Early withdrawal usually costs a small penalty.
Frequently asked questions
- Is a fixed deposit safe?
- Yes — FDs are among the safest options; in India bank deposits are insured up to ₹5 lakh per bank by the DICGC.
- Can I withdraw an FD early?
- Usually yes, but you'll typically earn a slightly lower rate and may pay a small penalty.
- How is FD interest taxed?
- FD interest is added to your income and taxed at your slab; banks deduct TDS once it crosses a yearly threshold.