Fixed deposits (FDs) are fixed-income investment products where investors need to put their funds for a fixed lock-in period called maturity. FDs are low-risk investments and offer assured returns at a fixed interest rate. These are easy investments without any complexity.

  • FDs are available with flexible tenures – starting from 7 days to 20 years, with most banks. With this flexibility, you can easily make a deposit to accomplish your short-term and long-term goals.
  • The interest rates offered on FDs are based on the tenure you choose, primarily.
  • Though these investments have a lock-in period, you can withdraw an FD before maturity against a penalty. To meet urgent financial needs, you can easily get a loan against FD. You can let your FDs earn at a fixed rate until maturity.

You can completely close the door on risk with a bank FD. Bank FDs come with insurance of up to Rs. 1 lakh by the DICGC. It covers both principal and interest.

Individuals of all ages consider FDs to include in their investment portfolios. Banks offer different types of FDs to serve their customers.

  • Each type of FD is unique in terms of its features and benefits. You should know each of these to decide on FD investments.
  • You can choose the one based on your needs to meet financial objectives and the amount you wish to invest.

How to Find the Right Fixed Deposit?

You can go through these different types of FD and choose the right type of FD Online as per your financial planning. Following are the important things to keep in mind before selecting the desired FD –

  • Payouts – Decide whether you want periodic interest payouts or a lump sum at maturity. Invest in cumulative FDs if you need accumulated funds with compound interest benefits. For monthly/quarterly/annually, you can invest in non-cumulative FDs.
  • Ratings – Examine the bank’s credibility by looking at the ratings provided by CRISIL and ICRA. These ratings of different types of fixed deposits are provided on the official website of the banks and credit rating bureaus.
  • Higher Interest Rates On Different Fixed Deposit Types – A cumulative FD can increase your interest rate. You can choose a long tenure to earn at a higher interest rate. If you invest a high amount, your FD interest rate will be higher comparatively.

The answer to ‘how many types of deposits are there’ depends on the bank you select to open an FD. Each bank offers different types of FDs. Here are the common types of FDs offered by most banks:

How many types of Deposits are there?

The following are the types of FD available in the market –

Standard FDs

It is a Regular form of FD where you can invest a lump sum amount for a certain tenure and earn at a fixed interest rate applicable as per the investment amount and tenure.

Tax-saving FDs

These FDs come with an annual tax exemption benefit of up to Rs. 1.5 Lakh. The lock-in period is five years; before that, depositors can not withdraw their invested amount.

Cumulative FDs

Cumulative FDs provide you interest at the end of maturity. With the compound effect, these FDs can offer you higher returns. Investors who do not need regular interest payments prefer these FDs.

Non-cumulative FDs

Non-cumulative FDs allow investors to receive interest at regular intervals. These FDs are suitable for individuals looking for a source of regular income through interest earned.

Senior citizen FD

Senior citizen FDs are designed for investors over 60 years. These FDs provide higher interest as compared to regular FDs. Banks offer a 0.50% additional interest rate to senior citizens.

Flexi FDs

These FDs come with the benefits of fixed interest rates, like FD, and liquidity, like savings accounts. Your FD account is linked to your Savings Account. If your Savings Account balance is lower than the required, the deficit amount will automatically transfer from your Flexi FD account to your Savings Account.


Anyone who wants to keep aside funds with utmost safety for the future can choose from different types of fixed deposits. Investing in bank FDs is an excellent way to save money and earn at a fixed interest rate to meet your future needs. Investors who do not believe in high-risk investments, like stocks, can consider fixed deposits with a high level of safety. These simple investments do not require your time for thorough research. In this robust financial growth, most banks offer loans of up to 75% of the deposit value in case of a financial crisis. Following digital processing, you can open an FD account online. An FD can be opened in the name of minors, also.