FD stands for Fixed Deposit. It is a financial provision offered by banks and non-bank financial institutions where you can deposit a lump sum of money and yield a higher rate of interest compared to a regular savings account. The interest rates on FDs are fixed when you open the deposit and the rate depends on the term that you wish to hold it for. The longest permissible term for FDs is 10 years. The interest on FDs is usually paid every three months from the date of the deposit. The customer may choose to have the interest reinvested in the FD account, in which case the deposit is called the Cumulative FD or compound interest FD. Many banks offer the facility of automatic renewal of FDs where the customers do not have to give new instructions for the matured deposit.