What is Fixed Deposit ( FD ) ? defination, features and benefits of Fixed Deposit.

Hi friends welcome to our website, here you can find all the information regarding fixed deposit and all the feature and benefits of Fixed Deposit.

Table of contents:

  1. Definition of Fixed Deposit?
  2. Where you can invest in fixed deposit?
  3. How many Types of Fixed Deposit schemes available?
  4. Difference between cumulative fixed deposit and non cumulative fixed deposit?
  5. Documents required for open a Fixed Deposit?
  6. Features and benefits Of Fixed Deposit?
  7. Conclusion

Definition of Fixed Deposit?

Fixed Deposit ( FD ) is a popular investment plan where you can save a particular amount of money for a specified time period with high rate of interest. It is most safe and easy way to invest your money and you can get high rate of return without any risk.

In fixed deposit your money is always safe and always your investment amount is also safe, and you can easily withdraw your money when any urgent requirement you need, but you have to serve the lock-in period of fixed deposit, most of the bank and NBFC provide you 3 months of lock-in perod, after that you can withdraw amount as per your requirement.

Where can i invest On Fixed Deposit?

More than two places where you can invest on fixed deposit, mainly Bank's and NBFC, Now a days many other online applications provide you options for fixed deposit, but always you should do a background check before opening any Fixed Deposit in any places.

  1. Main place and secure way to open a Fixed Deposit account is Bank's. Where you can get intrest rate from (minimum 2.5% to maximum 8.50% ) it's depends on how many years ( tenure ) you are investing.
  2. Second place Is any NBFC (Non banking finance Company) it is also a safe place for open a Fixed Deposit account. here is the pro method for you. Here you can get highest intrest rate on your Fixed Deposit ( minimum 4.00% to Maximum 10.00% ) it's depends on how many years ( tenure ) you are investing.

Many people have a confusion there is a risk factors for investing in any NBFC but it's a very big myth. NBFC is equal secure place like Banks to invest in FD.

All the Fixed Deposit schemes are regulated by Reserve Bank of India ( RBI ).

How many Types of Fixed Deposit ( FD ) available?

There are different types of Fixed Deposit ( FD ) offers by different Banks and NBFC but mostly there are two types of Fixed Deposit schemes available, Cumulative and Non Cumulative Fixed Deposit.

Cumulative Fixed Deposit Plan.

Most popular investment plan of Fixed Deposit is cumulative. Where you can return your maturity amount ( principal+ Intrest ) at the end of the fixed deposit tenure. 

For example:

You have invested Rs 100000/- of fixed deposit from today with 9.00% intrest rate for 60 tenure ( 5 years) in this period your interest amount will be Rs 56,051/- and your maturity amount after 5 years will be Rs 1,56,051/-

So in cumulative fixed deposit plan you will get return your FD maturity amount on the end of your tenure.

Non Cumulative Fixed Deposit Plan.

Non Cumulative Fixed Deposit Plan having a option to choose a frequency of time in which you can get return your earned intrest amount, you can choose, monthly, quarterly or yearly return option. where you can get return your earned intrest amount. This plan will be more helpful for senior citizens to invest, they will receive a fixed return for whole tenure of fd. And at the end of the fixed deposit tenure they will receive the invested amount back to his account.

For example:

You have deposited Rs 10,00,000/- in fixed deposit non cumulative scheme with 8.27% intrest rate and 60 tenure ( 5 years ) you have choosen Monthly Return option. Then you will receive total interest Rs 4,14,000/- with monthly return amount Rs 6,900/- in 60 instalments, and after maturity you will receive your invested amount Rs 1000000/- back in your account.

Difference Between Cumulative Fixed Deposit and Non Cumulative Fixed Deposit

  1. Cumulative fixed deposit is a reliable option for him who want to invest in a long term fixed deposit plan. 
  2. Non cumulative deposit will be reliable option for him who want return from investment with monthly, quarterly, yearly basis for spending money is his daily expenses.
  3. In cumulative fixed deposit, interest will compound annually and added with principal amount. And every year principal amount will increase, and intrest will calculate on that amount in next year. And so on.
  4. In Non cumulative fixed deposit, intrest amount will return back periodically which you have selected, monthly, quarterly or yearly basis. Only your principal amount will return at the end of the term.
  5. In cumulative fixed deposit you will get high return because you interest amount is being compound every year. It will be more beneficial for long term investers.
  6. Non cumulative fixed deposit will be intrested rate of same as cumulative fixed deposit but it's Intrest amount will not be compound it will direct credit to customer account when it will earned.
  7. Cumulative fixed deposit plan will fulfill all long term goals of customer, like home building, marriage purpose, investment for children future etc.
  8. Non cumulative fixed deposit plan will be beneficial for fulfill short term needs, like payment of Monthly emi, payment of insurance premiums, fulfill monthly expenses etc.

Documents required for open a Fixed Deposit?

You can invest in a Fixed Deposit with a very minimum documentation, recent times you can invest through online also from any Bank or NBFC company website.

For Offline process you should visit any Bank or NBFC company branch and there you can invest on fixed deposit. Documents required.

KYC Documents for both online and offline process:

  1. Adhaar card
  2. Pan Card
  3. Bank Passbook/ Cancelled Cheque
  4. Passport Size Photo

Other Information for both online and offline process:

  1. Your Mobile number
  2. Your Email address
  3. Your Nominee details

Fixed deposit application form ( Bank/ NBFC will provide you) for offline only.

Any other document may be required it will vary for all.

You can make payment any prefered method they have available for receiving payment.

Features and benefits Of Fixed Deposit?

Some best features of Fixed Deposit i have shared here. It will help for to understand more about fixed deposit and its features.

Flexible Tenure:

In Fixed Deposit Plan you have a free option for choose tenure, from 1 year ( 12 nos of tenure ) to 10 years ( 120 nos of tenure ) which will help you to invest for a long period of time and able to get high return.

High intrest rate:

You can get highest return on investment from any other investments plans in market. More tenure you invest you will get more return. Fixed deposit is most safe investment plan, you will get fixed interest rate for all time, company performance and current situation will not affect in your interest, you will get intrest rate which you selected time of fixed deposit. Bank and NBFC both providing you good internet on fixed deposit, but NBFC provides more Intrest than banks.

Tax Benefit:

If you are investing in fixed deposit plan any short term and long term fixed deposit both cases you can claim tax Benefit by citing it as an investment. If you don't want to deduct tax, if your income not coming under income tax return slab, you can submit 15G form if your age under 60 , If you are investing for senior citizens, you should submit 15H from for Stop deduction of tax.

Loan Against Fixed Deposit:

If during your investment continuation term , any emergency financial needs arrises, if you don't want to pre close your fixed deposit, then you can take loan Against your fixed deposit 70% to 90% of your fixed deposit amount. Here intrest on your loan will be more than the intrest rate of fixed deposit.

Guaranteed return on fixed deposit:

Fixed Deposit offers fixed return and guaranteed return. So there is zero risk for get back your investment. fixed deposit will not depend on any market conditions its intrest amount will not increase or decrease. These are fixed. So if you want a stable return, invest on fixed deposit.

Flexible Tenure selection option:

In Fixed Deposit schemes you have a very easy options to choose a very minimum time period to a maximum time period tenure for your fixed deposit. More tenure of time you will invest your interest amount will be increased so on. Also who want to invest for a short time period, also there are options available for him. So choose best tenure option in time of your fixed deposit.

Higher Interest in Fixed Deposit for senior citizens:

Senior citizens will find more Intrest rate than others it will be best option for senior citizens to invest in fixed deposit. If you want to invest in fixed deposit, then you should open fixed deposit account if you have any senior citizens members in your home.

More Intrest on renewal:

If you have already invested in any fixed deposit or if you want to invest in fixed deposit, then you have a option to refund on maturity or renewal on maturity. If you want to invest your money in fixed deposit after maturity, then you should auto renew your fixed deposit before maturity, then you will get more Intrest than normal deposit interest rate, it will be more beneficial for long term fixed deposit.

Affordable minimum deposit option:

If you are a beginner and want to invest in fixed deposit will a small ticket amount, then you can do it also. You can invest in fixed deposit with a very minimum amount. This will help you to invest minimum investment for your future.

Periodic return option:

If you want to receive every month, every quarter or every yearly return, then you should invest on fixed deposit non cumulative fixed deposit plan, where you have to choose option for return option. You should choose monthly, quarterly, yearly, return option to refund your interest amount.

Pre mature withdrawal:

If you want to withdraw your fixed deposit amount before maturity date, then you can easily withdraw your fixed deposit. Very easily. It will be more beneficial when any urgent issues arrises, or any financial needs arrises.


Friends fixed deposit plan is best place to invest your money with zero risk. If you want to invest your money for future with good Intrest rate with zero risk, then fixed deposit is the best option to invest. Now is the time to invest. If any issues arising regarding fixed deposit, then feel free to contact Us. Please comment, we will definitely resolve your issue. Thanks for support us.

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