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Before telling you about the certificate of deposit vs fixed deposit, let me share with you what certificate of deposit and fixed deposit mean.
A certificate of deposit is a form of agreement between the investor and the bank where the investor pays an amount for a period of time and earns a good profit from it. The tenure of investment is fixed and afterwards, you can redeem your certificate of deposit.
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On the other hand, a fixed deposit is a financial instrument where you can invest money for a fixed period of time and earn profit at a predetermined interest rate.
Since both Fixed Deposit (FD), and Certificate of deposit (CD) are similar, let us understand the difference between certificate of deposit and fixed deposit.
Difference between FD and CD:
Cash Deposit |
Fixed Deposit |
The duration of CD is shorter than FD. The maximum tenure of a CD is 12 months. |
FD offers a wider range of tenures from a span of 7 days to 10 years of investment tenures. |
A minimum of Rs 1 lakh is required to invest in CDs. |
You can invest in FD at Rs. 1000 only. |
You cannot secure loans or other forms of financial aid with CD. |
You can apply for loans against your FD. |
Although CDs can help you earn more interest FDs are better because it provides long-term investment and it is a risk-free investment.
This is the certificate of deposit vs fixed deposit difference. I hope you find this helpful.
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September 4, 2022
2022-09-04T23:58:35+00:00 2022-09-04T23:58:36+00:00Comment
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