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Money Management & Personal Finance : What Is a Fixed Deposit?

    Fixed deposit, or commonly referred to as "FD", is a type of bank savings or investment account that promises the investor a fixed rate of interest. In return, the investor agrees not to withdraw or access his / her funds for a fixed period of time.

    In a fixed deposit investment, interest is only paid at the very end of the investment period. This is unlike regular savings accounts, where interest is calculated daily and typically paid to you at the end of each month. Because the investment term and interest rate are fixed, you can very easily calculate the amount of interest you will earn at the end of any fixed deposit investment.

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