For Indians, investing in a fixed deposit has always been one of the preferred choices. There is very low risk involved while the returns are guaranteed. Also, fixed deposits are not market linked thus market volatility plays no part, thus, an ideal choice for those who are less aware of the capital market.
What is a Fixed Deposit?
Fixed deposit is a financial instrument in which there is a fixed rate of interest for a fixed period of time. Tenure of deposit can range from as little as 7 days and it can stretch out till 10 years (20 years in some banks).
Here, investors are offered with a higher rate of interest and thus the returns are ascended as compared to keeping one’s money in a savings account.