What is a Bank Fixed Deposit?

A fixed deposit or term deposits is an saving option offered by banks wherein a depositor can invest their money for a fixed tenure & rate. The rate of interests depends on the duration of the deposits & the banks.


  1. Depositor can earn interest on surplus funds available in the account
  2. Encourages saving habit
  3. Only one fixed deposit account can be opened at a time. The depositor can open multiple accounts for other such deposits.
  4. The deposit can be renewed or withdrawn up on maturity.
  5. As per traditional scheme, the interest earned on FDs gets credited to the depositor’s account either on monthly or quarterly basis, as opted by the account holder
  6. Premature withdrawals are not permitted but in case of emergency, banks allow closure of FD accounts. The deduction charges will be levied (percentage of charges may vary from bank to bank)