🏦 What is Fixed Deposit?
Fixed Deposit (FD) is a safe investment where you deposit money with a bank for a fixed period at a guaranteed interest rate.
Simple Example:
Deposit ₹1,00,000 for 1 year at 6.5% interest. Get ₹1,06,500 after 1 year.
⚙️ How Fixed Deposit Works
1. Choose Amount & Tenure
Decide how much and for how long
2. Lock Interest Rate
Rate fixed for entire tenure
3. Money Locked
Cannot withdraw before maturity
4. Get Principal + Interest
Guaranteed returns at maturity
📊 Types of Fixed Deposits
Regular FD
Standard FD with fixed rate
Tax Saver FD
5-year lock-in, 80C benefit
Senior Citizen FD
Extra 0.5% interest for 60+ age
Flexi FD
Partial withdrawal allowed
💰 Current FD Rates (2026)
Senior Citizens: +0.5%
✨ Benefits of FD
✓ Guaranteed returns - no market risk
✓ DICGC insurance up to ₹5 lakh
✓ Flexible tenure (7 days to 10 years)
✓ Loan against FD (up to 90%)
✓ Auto-renewal option
✓ Nomination facility
⚠️ FD Disadvantages
❌ Lower returns than equity
❌ Interest is taxable
❌ Money locked for tenure
❌ Penalty for early withdrawal
❌ Inflation may reduce real returns
💰 FD Returns Calculator
₹1,00,000 @ 6.5%
1 year: ₹1,06,500
2 years: ₹1,13,423
3 years: ₹1,20,795
5 years: ₹1,37,009
₹5,00,000 @ 6.5%
1 year: ₹5,32,500
2 years: ₹5,67,113
3 years: ₹6,03,973
5 years: ₹6,85,043
₹10,00,000 @ 6.5%
1 year: ₹10,65,000
2 years: ₹11,34,225
3 years: ₹12,07,946
5 years: ₹13,70,087
⚖️ FD vs Other Investments
Fixed Deposit
✓ Guaranteed returns
✓ No market risk
❌ Lower returns (6-7%)
❌ Taxable interest
Mutual Funds
✓ Higher returns (12-15%)
✓ Tax efficient
❌ Market risk
❌ No guarantee
PPF
✓ Tax-free returns (7.1%)
✓ 80C benefit
❌ 15-year lock-in
❌ ₹1.5L annual limit
❓ Frequently Asked Questions
Can I withdraw FD before maturity?
Yes, but with penalty. Usually 0.5-1% reduction in interest rate.
Is FD interest taxable?
Yes, FD interest is added to your income and taxed as per your slab.
What happens if bank fails?
DICGC insurance covers up to ₹5 lakh per depositor per bank.
Can I get loan against FD?
Yes, up to 90% of FD value at 1-2% above FD rate.
🔗 Related Tools & Guides
Calculate Your FD Returns
Use our FD calculator to compare returns across different banks and tenures.
FD Calculator →