Term Deposit Vs FD - Difference Between Term Deposit and FD

What is a Fixed Deposit?

Fixed Deposit (FD) is a term deposit provided by banks where you can invest a lump sum amount and earn a fixed interest rate for a specified period. It comes with assured returns as compared to Savings Account. These deposits prove to be a great option for safe investment and growing your savings. FDs provide financial stability which makes them suitable for achieving long-term financial goals.

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.