FinTech Beginner

Fixed Deposit (FD)

💡 In plain English: Lock your money with a bank for a fixed period at a predetermined interest rate — generally considered lower-risk but returns may not keep pace with inflation.

Definition

A savings instrument where money is deposited for a fixed tenure at a predetermined interest rate. Deposits up to ₹5L per bank are insured by DICGC.

📌 Real-World Example

₹5L FD for 2 years at 7.5% p.a. → earns ₹75,000 interest (pre-tax). After 30% tax: ₹52,500. Real return after 6% inflation: just 0.5%/year. Safe but wealth is not built on FDs alone.

🔢 Formula

Maturity = P × (1 + r/n)^(nt)
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Related Terms

Compound Interest
Your money earns interest, then that interest earns MORE interest...
Simple Interest
Interest calculated only on the original amount you deposited — no...
Inflation
The rate at which prices rise over time — eroding the buying power...
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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