About Fixed Deposits
A Fixed Deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date.
Key features of Fixed Deposits:
- Fixed interest rate for the entire tenure
- Higher interest rates for senior citizens
- Option for periodic interest payouts or cumulative interest at maturity
- Premature withdrawal allowed with penalty
- Loan facility available against FD
- Tax benefits available for tax-saver FDs (5-year lock-in)
- Interest earned is taxable as per income tax slab
