Fixed deposits explained: how FD interest works

A fixed deposit (FD) is a savings product where you lock a sum for a fixed period in return for a guaranteed interest rate.

How interest works

Most FDs quote an annual rate. For a deposit paid at maturity, interest is roughly:

interest = principal × rate × (months ÷ 12)

Try it with our FD maturity calculator.

Choosing a tenor

• Short tenors keep your money flexible.
• Longer tenors usually pay more but lock you in.

Compare current FD rates across banks and finance companies before deciding.