What is FD and How It Works?

Before getting into the details, you need to know how does a Fixed Deposit work?

Fixed Deposits, also popularly known as time deposit, let you earn interest by depositing an amount for certain predefined tenure. There are multiple types of FDs available by almost all the major banks in India with tenures ranging from 7 days to 20 years.

Fixed Deposit is considered as one of the best fit for investors who want to safely grow their money as it lets them earn interest on the deposited amount over a period of time. The moment the money is invested, it gets locked and the investor can receive the principal along with the interest amount upon maturity. Now you have a fair sense of what an FD is, let us walk you through how does a Fixed Deposit work?

How Fixed Deposit Works?

Fixed Deposits are deposits for a fixed or specified period chosen by the investor at a fixed rate of interest. You can deposit money for as short a period as 7 days and usually up to 10 years.

Now, let’s look at the basics of how fixed deposit works. When you open a fixed deposit with a bank or even a non-banking financial company, the bank utilizes your money to lend loans to borrowers. In return, it pays you an interest. Each bank or financial institution that is offering fixed deposits fixes its own deposit rates. It is influenced by the changes in repo rates as revised by the Reserve Bank of India from time to time. The interest of FD varies based on the time period and the amount deposited. Moreover, most of the banks offer higher interest rates to senior citizens. Moreover, NBFCs are likely to offer higher interest rates than banks.

One of the most important things to know about how FD works is that during the course of the FD, even if the prevailing interest rates fluctuate up or down, you will be entitled to the rate of interest that was promised to you when you first made the deposit. This assurance is comforting for the investor, an important reason why fixed deposits are so popular.

Features & Benefits of Bajaj Finance FD

A Fixed Deposit comes with many short term and life term benefits. A few of the prime benefits of FD are flexible investment tenure, senior citizen benefits, assured returns, emergency loan facility and a lot more. Let’s talk about the benefits of FD in detail. 

  • Fast Online Process


One of the best benefits of FD is that you don’t have to visit any branch or go for a lengthy documentation process. With Finserv MARKETS, apply for an Bajaj Finance FD, submit documents and keep track of your fixed deposit account online. Seamless and hassle-free!


  • Competitive Interest Rates


Finserv MARKETS offers the best fixed deposit interest rates in India. Bajaj Finance FD interest rates can go up to 7.25%.


  • Senior Citizen Benefit


Finserv MARKETS offers fixed deposit rates for senior citizens that are as high as 0.25%, over and above the existing rates.


  • Flexible FD Tenure

Another attractive benefit of FD is that you can choose a flexible investment period that ranges from 12 months to 5 years and calculate your returns with the FD calculator.

  • Assured Returns


Finserv MARKETS and secured investments go hand in hand. Irrespective of market fluctuations, we promise high returns. Your money is in safe hands.



  • ✔️How does Fixed Deposit Work?

    Fixed Deposits work by depositing your money in a bank or a non-banking financial company for a certain period of time and earning interest on the amount.

  • ✔️How can I make money with Fixed Deposit?

    You can grow your money by depositing it in an FD and earning interest on it once it matures after a chosen term of the lock-in period.

  • ✔️Can you lose money in Fixed Deposit?

    The chances of losing out on your investment in a Fixed Deposit are minimal.

  • ✔️How can I get maximum returns from Fixed Deposit?

    You can earn maximum returns on Fixed Deposit by following the below mentioned steps:

    1. Carefully plan your investment strategy.

    2. File your returns on time.

    3. Ladder your FDs for liquidity and tax benefits.

    4. Always choose Cumulative FD for funding long-term goals.

  • ✔️Can I deposit monthly in Fixed Deposit?

    Yes, you can deposit in a monthly income FD scheme that offers flexibility as the banks provide the option of monthly, quarterly or half-yearly income plans. The interest earned on these fixed deposit schemes is high.

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