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Kalyan City is a fast emerging residential township in the Thane district of Maharashtra state, India. It is a central suburban town and resides 54 kms north-east of Mumbai. This blog regularly shares quality academic materials. Here we also document our unique experiences and vivid memories of life. Read our lucid informative articles to excel your understanding, knowledge and success.

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Articles published on Kalyan City Life blog are inspired from our work experience, field research, study of various good books and papers, seminars and consultations from subject scholars. Our unique collection of useful study notes is an outcome of a team effort and hard work of Gaurav Akrani, Prof. Mudit Katyani and Manoj Patil.

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Fixed Deposit Account of Bank - Meaning, Features, Advantages



square Meaning of Fixed Deposit Account - Bank ↓


The account which is opened for a particular fixed period (time) by depositing particular amount (money) is known as Fixed (Term) Deposit Account.

The term 'fixed deposit' means that the deposit is fixed and is repayable only after a specific period is over.


fixed deposit account of bank

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Under fixed deposit account, money is deposited for a fixed period say six months, one year, five years or even ten years. The money deposited in this account can not be withdrawn before the expiry of period.

The rate of interest paid for fixed deposit vary (changes) according to amount, period and from bank to bank.


square Features of Fixed Deposit Account ↓


The main features of fixed deposit account are as follows:-

  1. The main purpose of fixed deposit account is to enable the individuals to earn a higher rate of interest on their surplus funds (extra money).
  2. The amount can be deposited only once. For further such deposits, separate accounts need to be opened.
  3. The period of fixed deposits range between 15 days to 10 years.
  4. A high interest rate is paid on fixed deposits. The rate of interest may vary as per amount, period and from bank to bank.
  5. Withdrawals are not allowed. However, in case of emergency, banks allow to close the fixed account prior to maturity date. In such cases, the bank deducts 1% (deduction percentage many vary) from the interest payable as on that date.
  6. The depositor is given a fixed deposit receipt, which depositor has to produce at the time of maturity. The deposit can be renewed for a further period.


square Advantages of Fixed Deposit Account ↓


The advantages of fixed deposit account are as follows:-

  1. Fixed deposit encourages savings habit for a longer period of time..
  2. Fixed deposit account enables the depositor to earn a high interest rate.
  3. The depositor can get loan facility from the bank.
  4. On maturity the amount can be used to make purchases of assets.
  5. The bank can get the funds for a longer period of time.
  6. The bank can lend such funds for short term loans to businessmen.
  7. Fixed deposits indirectly boost economic development of the country.
  8. The bank can also invest such funds in profitable areas.


square Basic Articles On Banking ↓


  1. Recurring Deposit Account - Meaning and Features
  2. Current Bank Account - Features and Advantages
  3. Saving Account Bank - Meaning, Features and Advantages
  4. How to Open a Bank Account ? 7 easy steps To Open a Bank Account
  5. What are the Main Advantages of Opening a Bank Account ?




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1 Comment :

  1. Nagarjun Reddy said...

    Yes, FD is best for savings .The fixed deposit is one such investment that will offer the investment option for the fixed term.

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