Fixed Deposits

From Financial Literacy Wiki

Fixed Deposits is similar to your savings account but it earns at a higher interest rate. But this higher interest rate comes at a cost, you have to 'promise' the bank that you will not take out the sum of money in the Fixed Deposits for a time period. As for how long this time period is will depend on the Fixed Deposit that you are leaving it in. The penalty for taking out or cancelling your Fixed Deposits is you will forgo the higher interest that you have earned so far. The bank will pay you at the prevailing rates for savings account most of the time.

The interest rate that your Fixed Deposits will earn depends on many factors. For instance, the banks you are making a Fixed Deposits in, the underlying currency of the Fixed Deposits, the tenure of the fixed deposits, the funds that you are committing to the Fixed Deposits and the macro interest rate environment.

Back to Investment