A Fixed Deposit (FD) is a popular investment scheme offered by banks and financial institutions, where an individual deposits a lump sum amount for a predetermined tenure at a fixed interest rate. The investor receives the interest at regular intervals, or the interest can be compounded over the term. The tenure of the FD typically ranges from a few months to several years, and the interest rate is generally higher than that of a regular savings account. Fixed Deposits are considered a low-risk investment, making them a preferred choice for conservative investors who seek safety and assured returns on their capital.

One of the key advantages of Fixed Deposit schemes is the certainty they offer, as the interest rate remains fixed throughout the tenure, protecting the investor from market volatility. Additionally, FD schemes often offer a range of tenure options and the flexibility of interest payouts (monthly, quarterly, annually, or at maturity). However, the liquidity is limited, as premature withdrawals often incur penalties and the invested capital cannot be accessed until the term expires unless an emergency arises. Despite this, Fixed Deposits remain a reliable option for conservative investors seeking stable returns with minimal risk.