A fixed deposit (FD) is a type of investment offered by both public and commercial banks and non-bank financial institutions (NBFCs). You can place a lump sum of money into an FD in exchange for interest and the principal amount at maturity. The period in which you invest in your maturity term and cannot withdraw funds before it expires. If you withdraw before the maturity date, you will be charged a penalty and will get a lower interest rate. It is the perfect moment to invest in FDs in India, as the best FD rates in India are becoming more appealing every year. A fixed deposit's interest rate fluctuates from one bank to the next. Furthermore, an FD pays a more significant interest rate than a savings bank account. Depending on the investor's decision, FD interest rates are paid either at regular intervals or the maturity of the FD. When your investment matures, you will receive the principal amount and the compound interest. Depending on the investor's decision, interest on an FD is paid either at regular intervals or the maturity of the FD. A separate bank account is not required to invest in a fixed deposit account. When you put money into a fixed deposit, it is locked in for the deposit term. You will earn interest on such a principal amount, which will be credited to your FD account according to the payout length. You can choose to receive monthly, quarterly, half-yearly, or annual payments. As a result, depending on the conditions, the interest rate is applied to the investment amount and compounded monthly, quarterly, half-yearly, or annually.
When your FD matures, you can either withdraw the money or reinvest it in the same or a different type of FD. You can also set up an auto-reinvest maturity instruction with your bank or NBFC, automatically reinvest the maturity amount at maturity. You can easily change the maturity instruction before the maturity date.
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About Author:Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms. Archives
August 2022
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