Fixed deposits (FDs) are fixed-interest-rate, time-bound monies canvassed for and accepted by banks from the retail customer. Banks accept both short and long-term fixed deposits. FDs are the most popular investment vehicle for retail investors in India because investors find banks very convenient to deal with.

These deposits are perceived to be highly safe and sufficiently liquid. FDs can help you secure your hard earned money for a long duration while giving you higher risk-free returns on your money than a regular savings account. In the current scenario (a volatile stock market) once again FDs are getting popular.

You can deposit your money with the bank for a fixed duration ranging from 15 days to 10 years. On maturing, the investor gets an amount that is principal plus the interest earned on this principal over the entire duration of FD.

Indian banks offer a wide variety of fixed deposit schemes to suit almost every need.

How the interest rate is calculated on your fixed deposit varies from bank to bank. For a fixed deposit of six months or above, the banks may calculate the interest on a quarterly basis. If the tenure is less than six months, simple interest is calculated at maturity.

Every fixed deposit is subject to the Indian income tax regulations prevalent from time to time. Keeping these regulations in mind banks deduct tax at source from your fixed deposits and issue you a TDS certificate for the same.