Term deposits are well known for the safety, liquidity and flexibility. Term deposit also known as fixed deposits allows a customer to lock in his deposit for a specific period at the interest rate prevailing at the time of opening of account (Fixed rate of interest). Term deposit is the most popular investment option among Indians.
Fixed deposits are a high-interest-yielding term deposit and offered in India. To compensate for the low liquidity, FDs offer higher rates of interest than saving accounts. The longest permissible term for FDs is 10 years. Generally, the longer the term of deposit, higher is the rate of interest.
