The Working of Fixed Deposits: An Insight

Many Indians for Investment opt FDs due to its stress-free nature. FDs are therefore preferred over most other investment options. They are stress-free due to the fact that they are a safe and secure form of investment when compared to stocks and mutual funds. Generally, FDs fall under term deposits along with Recurring Deposits. These are offered by banks and Non-Banking Financial Companies or NBFCs.

You can differentiate between FDs and RDs by their properties. Investment in FDs is a onetime affair, i.e., you invest a sum only one time during the whole tenure of the FD. Whereas in RDs you have to invest a sum every month. This is evident that out of the two FD is the clear winner as it is quite easy to invest in it.

Here is more on FDs:

1. Earn a Fixed Return
   
   

   In FDs, you invest a certain sum and that money will be kept safe for a tenure. In this tenure, you will earn interest on your investment. For senior citizens, the earnings are slightly higher.
2. 
   

   Fix the Tenure of your FD

   You yourself have to choose between a term or tenure from a minimum of 12 months to a maximum of 60 months for your FD which will depend upon your goals and stability of finance.

There is much more to FDs. This was only the tip of the iceberg. If you want to learn more in detail about how FD works an insight for beginners. 

Also, Read This: Indian Banks Recurring Deposit Interest Rates 2019