Fixed Deposit Rates

What is a Fixed Deposit

Fixed Deposit also known as FD is a term deposit which allows individuals to deposit money for a fixed time period. When the deposit period ends, the account holder get interest on the amount deposited along with principal.  Account holder can either withdraw interest as it accrues or can wait for it to compound till end of the term.  Some fixed deposits come with an automatic extension term where if you do not withdraw it at maturity it will rollover into a new plan and start accruing interest again.  Fixed deposits are good saving instruments which allow you to grow your money without any risk.

Things to Consider

Before you go out and start shopping for a fixed deposit you should consider a few things:

• Term - How long are you planning to put the money away for?  Will you need this money for that term?  If you are likely to withdraw before the maturity then you may not get the full interest or may have to pay a penalty.  You should carefully plan the term.
• Interest - FDs come with various interest rates depending on the term.  You should carefully look at available interest rates and understand the terms.
• Bank Selection - While some out of state or remote banks may offer you higher interest, you should look for a bank in your state so that it is easier for you handle your money at the time of deposit and­ maturity.

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