Certificate of Deposits (CD) and Fixed Deposits (FD) are tailored to cater to the diverse needs of investors, with both instruments offering fixed returns and stability. However, subtle nuances in their features can significantly impact your financial strategy. Read on to learn more about the differences between Certificate of Deposit and fixed deposit to make informed decisions aligning with your goals, risk appetite, and investment horizon.

Certificate of Deposit vs. Fixed Deposit - Comparison


Certificate of Deposit

Fixed Deposit

Minimum investment

₹1 Lakh


Return on investment

Comparatively higher in the case of organisation-issued CDs 

Ranges from 2.50% - 9.20% across tenors


Could range from a few months to several years

Ranges from 7 days to 10 years

Interest payment

Typically include monthly, annual or lump sum payout options at maturity

Interest can be paid periodically (monthly, quarterly, annually) or at maturity


Less liquid; withdrawing funds before maturity may result in penalties.

Premature withdrawals could incur penalties in the form of reduced interest rate

In conclusion, both CDs and FDs are popular investment options with distinct characteristics catering to the diverse needs of investors. CDs, often issued by banks and financial institutions, are known for their fixed interest rates and defined tenures. They may offer liquidity through secondary market trading but typically come with penalties for early withdrawals.


On the other hand, Fixed Deposits, available through banks, non-banking financial companies (NBFCs), and other authorised entities, provide investors with flexibility in choosing tenures. While FDs offer stability and various interest rate options, they may come with penalties for premature withdrawals, depending on the terms of the deposit.


Investors looking for a tradable instrument with a fixed interest rate and a potentially higher minimum investment amount could favour Certificates of Deposit. Those seeking flexibility in tenure, lower minimum investment requirements, and a reliable fixed return may find FDs more suitable.


It is recommended for investors to carefully evaluate the terms, interest rates, and liquidity features of each option before making an informed investment decision.


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Can I trade Certificates of Deposit in the secondary market?

Yes, CDs can be traded in the secondary market before maturity, providing a degree of liquidity.

Which option is considered more liquid in case of an unforeseen need for funds?

Both CDs and FDs allow for early or premature withdrawals which may incur penalties

Are FDs insured against losses?

Bank FDs  are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 Lakhs.

Do Certificates of Deposit offer tax-saving benefits?

Generally, CDs do not offer specific tax-saving benefits. On the other hand, tax-Saving FDs offer deductions under Section 80C of the Income Tax Act.

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