A fixed deposit account is a type of deposit account provided by banks or non-bank financial institutions that offers a higher rate of interest than a regular savings account. It is also known as a term deposit, time deposit, or bond in different countries. In a fixed deposit account, the depositor invests a sum of money for a fixed period of time, ranging from a few days to several years, and the bank pays a guaranteed interest rate on the deposited amount. The depositor is not allowed to withdraw the money before the due date, and if they do, banks can charge a penalty for premature withdrawal. However, some banks offer additional services to fixed deposit holders, such as loans against FD certificates at competitive interest rates.

Fixed deposits are one of the best savings instruments for those looking for assured returns on deposits. They are a popular investment avenue in India, particularly among risk-averse middle-class investors. The tenure of an FD can vary from 7 days to 10 years, and the interest rate on the deposit depends on the period for which the funds are placed with the bank. Fixed deposits are a good option for those who want to earn higher returns on their idle funds lying in their savings account.

In summary, a fixed deposit account is a type of deposit account that offers a higher rate of interest than a regular savings account, where the depositor invests a sum of money for a fixed period of time, and the bank pays a guaranteed interest rate on the deposited amount. The depositor is not allowed to withdraw the money before the due date, and if they do, banks can charge a penalty for premature withdrawal.