Fixed deposits

The deposits that are maintained for a certain time period at a certain interest rate are known as fixed deposits. This deposit system is important as a way to deposit excess money and as a safe investment opportunity. There are several characteristics of a fixed deposit. They are,

# Maintaining the deposit for a certain period of time.
# Varying interest rates depending on the amount deposited and the deposit period.
# Receiving a relatively higher interest rate compared to normal savings accounts.
# A certain percentage of the fixed deposit can be obtained as a loan by providing the fixed deposit as a collateral.
# Interest will be accumulated monthly, at maturity or as per the agreed terms.
# Bank gives a certificate mentioning the details such as the deposit date, deposited amount and maturity date.

Opening a fixed deposit

When opening a fixed deposit, a duly completed fixed deposit mandate, deposit slip, Know Your Customer (KYC) form and a tax declaration form should be submitted along with the national identity card to the bank. When all these requirements are fulfilled, the bank issues a deposit certificate to the customer.


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