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In a fixed deposit investment, interest is only paid at the very end of the investment period. This is unlike regular savings accounts, where interest is calculated daily and typically paid to you at the end of each month. Because the investment term and interest rate are fixed, you can very easily calculate the amount of interest you will earn at the end of any fixed deposit investment.
HOW IT WORKS?
With a fixed deposit, one of the most unusual characteristics is that funds cannot be withdrawn for a fixed period of time.
Fixed deposit term can vary anywhere from one month to five years.
When you invest in a fixed deposit investment, you are usually presented with different “tenure” or term options e.g. one month, three months, six months, one year etc.
Each “tenure” or term comes with a predetermined interest rate.