What is an FD?

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

A 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. For the purposes of investment there are varied types of fixed deposits present and users can pick the one which fits their investment needs the best.

The different types of FDs also allow the investors to withdraw the money before the maturity amount with a small penalty involved at times.

Different Types of Fixed Deposits

Depending on the needs of the investor the following types of fixed deposits exist. You can make an informed decision as to which type of FD to choose from the different types of Fixed Deposit available and which suits your investment needs the best.

Following are the types of FDs available in India:

Sr No




Bank deposits

These are usually offered by banks to customers who have an existing savings account. While some bank deposits provide additional features like deposit insurance of up to Rs 1 lakh on opening fixed deposit accounts, their rates of interest are usually lower than those provided by Non-Banking Finance Companies (NBFCs).


Company Deposits

Company FDs or Corporate FDs are offered by NBFCs with higher interest rates. You must, however, ensure that investments are only made in companies with adequate credit worthiness. On Finserv MARKETS, you can select fixed deposits of Bajaj Finance, which have good ratings from leading analytical companies like CRISIL and ICRA. Bajaj Finance Fixed Deposits has the highest stability rating of FAAA/stable by CRISIL and MAAA/stable by ICRA. In 2019, Bajaj Finance was assigned a long-term rating of ‘BBB-/Stable’ and a short-term rating of ‘A-3’ by S&P Global Ratings.


Cumulative fixed deposits

Cumulative FDs are those types of FDs where the earned interest is only available to you on maturity. You cannot receive the interest amount on regular intervals. The crucial benefit of a cumulative FD is that it has a higher interest rate as compared to non-cumulative FDs. These are best suited for investors who do not need a regular interest payout, but would want more returns on their FDs. You can invest in a cumulative FD, which has a tenor ranging from 12 months to 60 months.


Non-cumulative fixed deposits

Non-cumulative FDs are the type of FDs where the financial institution pays you the interest earned on the principal amount at regular intervals. On Finserv MARKETS, you can choose the frequency of the interest payout at the time of application, which can be monthly, quarterly, half-yearly or annually. Here, the tenor for the FD ranges between 12 and 60 months. You must, however, note that the maturity amount decreases if the interest payout frequency is higher. But, the advantage of this FD is that you can receive regular interest payouts, to meet your regular expenses. These FDs are best suited for people like pensioners who need a regular income from interest payouts.


Tax-saving fixed deposits

These FDs have a longer tenure of up to 5 years. The key benefit of this type of FD is that you can claim a tax deduction for income up to Rs 1.5 lakh in a given assessment period, under Section 80 C of the Income Tax Act. You must, however, remember that this type of FD comes with a lock-in period, and you cannot break the deposit or withdraw it prematurely.


Senior citizen fixed deposits

Senior Citizen Fixed Deposits are a special type of fixed deposit for people above 60 years of age. The key highlight of the scheme is that it provides a higher rate of interest as compared to other FDs, thus allowing the elderly to meet a wide range of financial requirements. For example, on Finserv MARKETS, senior citizens can invest in the Bajaj Finance Fixed Deposits, with the benefit of an interest rate that is 0.35% over and above the existing interest rate. Here, senior citizens can invest in tenures ranging from 12 months to 60 months with an interest rate of up to 8.95%.


Fixed deposits for NRIs

NRIs often consider investing in FDs back home as the investment in an NRI FD is not only safe from market volatility, but also provides a higher rate of interest as compared to the interest from traditional savings accounts. For instance, Bajaj Finance Fixed Deposit for NRIs, available on Finserv MARKETS, provides a slew of benefits like high returns up to 8.95% along with flexible tenor options ranging from 12 months to 36 months. It also provides multi-deposit and easy renewal facilities. As an NRI, you can invest in this FD from your NRO account. Person of Indian origin (PIO) and Overseas Citizen of India (OCI) can also invest in this FD.


Standard/Regular fixed deposits:

This is the most common of all FDs. Being a regular and uncomplicated form of investment; you have simply to invest your money for a certain pre determined period, for which a predetermined rate of interest is provided. Usually, you can deposit your amount in a period ranging from one year to 10 years. On Finserv MARKETS, you can invest as a new customer in the Bajaj Finance FD, and avail an interest rate of 8.60% for cumulative scheme tenors ranging from 36 to 60 months. The key highlights of a standard fixed deposit include the ease and convenience of investment, security of the principal amount, and a high interest rate.


  • ✔️Is there any special interest rate for Senior Citizen on Fixed Deposits?

    Among the many types of Fixed Deposits offered by banks and non-banking financial companies, senior citizen Fixed Deposits offer higher interest. Yes, Finserv MARKETS offers extra 0.25% interest rate for senior citizens.

  • ✔️What are the different types of fixed deposits?

    The different types of Fixed Deposit are as following:

    1. Bank deposits

    2. Company Fixed Deposit

    3. Cumulative fixed deposits

    4. Non-Cumulative fixed deposits

    5. Tax-saving fixed deposits

    6. Senior Citizen Fixed Deposit

    7. Fixed deposits for NRIs

    8. Standard/Regular fixed deposits

  • ✔️Which type of FD is best?

    Bank FD is the most comprehensive Fixed Deposit scheme.

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