Full Form of FD

What is FD?

FD, or Fixed Deposit, is a financial instrument provided by banks and non-banking financial companies (NBFCs) in India where an individual deposits a lump sum amount for a fixed period at a predetermined interest rate. It is one of the most popular savings tools in India due to its safety, guaranteed returns, and liquidity options. When you open an FD, you agree not to withdraw the money for a specific tenure ranging from 7 days to 10 years. In return, the bank pays interest, which can be higher than a regular savings account. At maturity, the principal along with the interest is returned. FDs are widely used for short-term and long-term financial goals, such as building an emergency fund, saving for a down payment, or retirement planning. They are also eligible for tax-saving under Section 80C of the Income Tax Act if locked in for 5 years (Tax-Saver FD). Interest earned is taxable, but senior citizens often get higher rates. The Reserve Bank of India regulates FD norms to ensure stability. In competitive exams like banking, SSC, and UPSC, questions on FD features, such as premature withdrawal penalty and TDS deduction, are common. Overall, FD remains a trusted avenue for risk-averse investors.

FD का फुल फॉर्म

Example

My grandmother invested her retirement corpus in an FD at SBI to get a steady quarterly interest.

FD — frequently asked questions

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