In India, the terms "Term Deposit" and "Fixed Deposit" are often used interchangeably, but they generally refer to the same type of financial product with a few nuanced distinctions based on context. Let me share some insights to answer your question: is term deposit and fixed deposit same.
Is Term Deposit Same as Fixed Deposit?
Here’s a detailed explanation:
Fixed Deposit |
Term Deposit |
Offered by financial institutions for an investor to deposit a lump sum amount for a fixed period at a predetermined interest rate |
Term Deposit" is a broader category that includes various fixed-duration deposit schemes offered by banks and financial institutions. It can include other fixed-term investments, such as recurring deposits. |
Interest rates are fixed for the entire tenure |
Offers fixed interest rates, but the rates might vary based on the type of deposit and financial institution |
Tenure ranges from 7 days to 10 years |
Term deposits, as a category, might offer additional options like RDs, which involve periodic deposits rather than a single lump sum. |
Premature withdrawal is possible but may attract penalties or reduced interest rates |
Term deposits also have a fixed maturity period, during which the principal amount and interest rate are locked in. |
Both types offer secure investment options with fixed returns but differ in terms of deposit frequency and flexibility. Your query for is term deposit and fixed deposit same should be solved.
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What is Better than Fixed Deposit?
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When I was trying to decide which deposit to choose. I went to a bank and spoke to the manager. I was left more confused about term deposit vs fixed deposit. Let me tell you about the options and if they have any advantages and disadvantages. You need to think of your financial goals before choosing one.
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From my understanding, term deposit and fixed deposit are the same. Mostly, bankers tend to use the word ‘deposit’. It is a stable and safe return on their investments. Term deposits and fixed deposits are kept for a fixed maturity where the depositor is not allowed to withdraw until the end of the maturity period.
Since there is no big difference between term deposit and fixed deposit. Let me share another investment option for customers i.e. Recurring Deposit. In case, you want to make a premature withdrawal you will end up paying an added penalty for breaking the withdrawal rule.
Many banks allow people to convert their Recurring Deposits to Fixed deposits. For the most part, fixed deposits are kept for a longer period than other types. You can take the funds in the form of Term Deposits, Savings Accounts and Current Accounts.
That is all from my end on term deposit vs fixed deposit.
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Is term deposit and fixed deposit same ?
Aarti
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2022-08-23T17:18:33+00:00 2022-08-23T17:18:34+00:00Comment
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