THE
ORANGE
HUB
Term Deposit Vs FD - Difference Between Term Deposit and FD
Â
What is a Term Deposit?
A ‘Term Deposit’ is simply a deposit that is locked-in for a certain term. By this logic, Fixed Deposits (FDs) and Term Deposits are the same. But that is not all, Term Deposits also cover other products such as Recurring Deposits, Post Office Deposits, Foreign Currency Deposits and Senior Citizen Deposits.
Both terms typically denote deposits made by customers with financial institutions for fixed periods of time at predetermined interest rates. Both are relatively low-risk and are offered by banks and other financial institutions to customers looking to earn stable returns on their savings. Common key features include a fixed tenure, a fixed rate of interest, a maturity date and penalties for premature withdrawals. However, both may vary slightly depending on the financial institution.
Read on to know more about Term Deposits and Fixed Deposits and the differences between the two.
Difference Between Term Deposits and Fixed Deposits
Both Term Deposits and Fixed Deposits offer fixed interest rates, ensuring stable returns. They also provide competitive interest rates and customisable tenures, offering investors greater flexibility.
While Term Deposits may offer varying termination dates and lower interest rates, ICICI Bank Fixed Deposits stand out with comparatively higher interest rates.
Features |
Term Deposit |
Fixed Deposit |
Interest rates |
Can have both a fixed or variable rate based on the market conditions |
Has a fixed interest rate throughout the tenure  |
Deposit tenure |
Varies based on the deposit type |
From 7 days to 10 years with ICICI Bank |
Charges on premature withdrawal |
Yes |
Yes |
Flexibility |
More flexible as compared to most FDs |
ICICI Bank FDs offer similar flexibility  |
Returns |
May yield lower returns |
Much higher returns |
Renewability |
Cannot be renewed |
Can be renewed |
Investor suitability |
Short-term investors |
Both short and long-term investors |
Scroll to top