Arjit Chalmela
Arjit Chalmela
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All About Fixed Deposits and Their Interest Rates

People who spend their money correctly and create the habit of saving can exponentially increase their fortune. There are endless ways to save money; a Fixed Deposit is one example. It is still the most popular investment in India. An FD is the most common investment instrument in India.

Many believe that FD interest rates make it a popular choice and prompt people to secure many of their funds. But what is an FD? It is a Term Deposit in which money gets locked up for a set amount of time. They provide the depositor with a fixed interest in exchange for locking the money. They are available at various rates from all banks. It is simple to open an FD and gets it done online.

All About Interest Rates

The amount invested, the interest rate on FD, and tenure influence how much interest gets generated on FDs. The basic formula is as follows:

Interest on FD = Invested amount x interest rate x (duration or 12 months)

However, interest rates differ depending on whether you choose a cumulative or non-cumulative FD. For example, you invested Rs. 35,000 for three years at a 7.1% annual interest rate. The cumulative FD maturity value will be Rs. 40,712. Non-cumulative FDs, on the other hand, pay out interest regularly and lose compounding capacity. Furthermore, the interest rates on non-cumulative FDs are lower than on cumulative FDs.

How To Select The Right FD?

When selecting an FD, consider the following factors:

● Compare different bank FD interest rates.

● Examine the lender's integrity by looking at the FD's safety rating from ICRA or CRISIL.

● Choose between a cumulative and a non-cumulative FD.

● Choose a bank that provides excellent customer service and a simple process for starting an FD.


● Safer than other investment vehicles

● Allows earning interest over a set period

● 10-year terms are available

● There is no maximum deposit amount

● Senior citizens are subject to higher rates

● Guaranteed FD interest rates

● The interest tax threshold

● Variable tenure

● Simple liquidation

● Apply for Loans through FD


● FD rates can reduce

● Fixed-rate funds

● Includes withdrawal penalties

● No tax benefits

● Fixed interest rates


FDs are a fantastic investment option if you want assured earnings without putting your money in danger. Furthermore, if you require a Loan, you can use your FD as collateral. After understanding everything, open an FD so that you can secure your future.

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