Fixed Deposit (FD)

Definition

A Fixed Deposit is a financial instrument where a lump sum amount is deposited with a bank or NBFC for a fixed tenure at a predetermined interest rate. Key features: tenures from 7 days to 10 years, interest rates vary by bank (6.5-7.5% for general citizens, 0.5-0.75% more for senior citizens), cumulative (interest reinvested) or non-cumulative (periodic payout) options. FDs up to Rs 5 lakh are insured by DICGC. TDS of 10% applies on interest exceeding Rs 40,000/year (Rs 50,000 for senior citizens).