What is Fixed Deposit?
Fixed Deposit also known as FD is an investment instrument offered by banks.
You deposit a certain amount of money in a bank as a fixed deposit and earn a higher interest rate than a savings account.
“Interest earned on a fixed deposit account is taxable.”
The time for which you can create a fixed deposit depends on the bank you are opening your FD account. Generally, it is between 7 days to 10 years.
Once you put your money in a fixed deposit account then, it is locked until maturity.
If you want to withdraw your money before maturity then, you have to pay a penalty amount which varies from bank to bank.