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What is the Difference Between Fixed Deposit and Cumulative Deposit?

In fixed deposit schemes, the interest is paid at periodic/specified intervals. The FD scheme is convenient for people who need periodic/monthly/quarterly interest payouts. In the cumulative deposit scheme, interest is payable only when the investment matures, i.e. the payout is made at the end of the investment tenor and both principal and interest are then periodically paid together.

Read About : Why Fixed Deposit is Best Investment option

Cumulative deposits are hence suitable for those who do not require periodic interest income and can wait till their investments mature. You should compare the benefits and features of fixed deposits and cumulative deposits in order to finalize the best option for yourself.
There are several options available to you like SIPs (Small Investment Plans) or even equity based mutual funds where you will have fund managers allocating your investments with a view towards helping you earn good returns. You can consider stocks and shares though this requires expertise at a different level or even real estate as an investment and asset for the future. However, investing in a Fixed Deposit (FD) is also a very good option since this gives you safe and assured returns without any exposure to market fluctuations and other risks. Through this investment you can earn high rate of interest on FD plans.

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