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Fixed Deposit

Fixed Deposits are deposits where a particular sum of money is invested for a fixed duration. The duration of Fixed Deposits is flexible. It can range from 7 days to 10 years. The rate of interest for the Fixed Deposit depends on the period for which the funds are locked in.

Just like a Recurring Deposit, a Fixed Deposit amount cannot be withdrawn until the maturity period. Premature withdrawal is allowed after the bank charges a penalty in the rate of interest. The minimum amount of investment for a Fixed Deposit is Rs. 5,000. The rate of interest on the Fixed Deposit ranges from 4% to 7.5%. You can also calculate your rate of interest using the FD calculator.

Some banks provide the option of a sweep-out facility where the amount above a particular balance in a Savings Account is automatically converted to a Fixed Deposit. This helps the Savings Account earn more interest.

How does a fixed deposit work?

A fixed deposit, or 'FD', is a type of savings/investment account that promises the investor a fixed rate of interest. In return, the investor agrees not to withdraw or access their funds for a fixed period of time. In a fixed deposit investment, interest is only paid at the very end of the investment period.

Which bank is best for a fixed deposit in 2020?

Banks FD Interest Rates Tenure
SBI 2.90% – 5.40% 7 days to 10 years
Canara Bank 2.95% – 5.30% 7 days to 10 years
HDFC 2.50% – 5.50% 7 days to 10 years
PNB Housing Finance 6.20% – 6.70% 12 months to 120 months
ICICI Bank 2.50% – 5.50% 7 days to 10 years
Axis Bank 2.50% – 5.50% 7 days to 10 years
IDFC First Bank 2.75% – 5.75% 7 days to 10 years