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The Rohika Central Co-Operative Bank Is A Co-Operative Institution Situated In Madhubani Bihar Established In 1909.
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Fixed Deposit
Fixed Deposit
A Fixed Deposit (FD), also known as a Term Deposit or Time Deposit, is a popular financial instrument offered by banks and financial institutions.
It allows individuals to deposit a lump sum amount of money for a fixed period at a predetermined interest rate. Fixed Deposits are considered to be one of the safest and most secure investment options available to investors.
Here's how a Fixed Deposit typically works:
Deposit Amount:
The investor deposits a specific amount of money in a Fixed Deposit account with the bank or financial institution. The minimum deposit amount varies from bank to bank.
Deposit Tenure
The investor selects a fixed tenure for the Fixed Deposit. The tenure can range from a few months to several years, depending on the investor's preference. During this period, the money remains locked, and premature withdrawal may attract penalties.
Interest Rate
The bank or financial institution pays a fixed interest rate on the deposited amount. The interest rate is determined at the time of opening the Fixed Deposit and remains constant throughout the tenure. Generally, the longer the tenure, the higher the interest rate offered.
Interest Payout
The interest earned on the Fixed Deposit can be paid out at regular intervals (monthly, quarterly, or annually) to the investor's bank account or added to the principal amount and paid out at maturity.
Maturity Amount
At the end of the fixed tenure, the Fixed Deposit matures, and the investor receives the maturity amount, which includes the initial principal amount and the interest earned during the tenure.
Premature Withdrawal:
In case of an emergency or immediate financial need, the investor can opt for premature withdrawal of the Fixed Deposit. However, this usually attracts a lower interest rate than the contracted rate and may involve a penalty.
Fixed Deposits are considered a low-risk investment because they are not subject to market fluctuations, and the interest rate is fixed at the time of investment. They are a preferred choice for conservative investors who prioritize capital preservation and a steady return on their investment.
