FD/RD

Here’s a concise explanation of various types of Fixed Deposits (FD) and Recurring Deposits (RD):

Fixed Deposit (FD): A savings option where a lump sum is deposited for a fixed term at a guaranteed interest rate, providing a risk-free return at maturity.
Regular Fixed Deposit: A standard FD where a fixed amount is deposited for a predetermined term, with interest earned at a set rate.
Tax-Saving Fixed Deposit: An FD with a 5-year lock-in period that qualifies for tax deductions under Section 80C of the Income Tax Act in India.
Senior Citizen Fixed Deposit: An FD for individuals aged 60 and above, offering a higher interest rate to support retirement income.
Cumulative Fixed Deposit: An FD where interest is compounded periodically and paid at maturity, ideal for investors seeking a lump-sum payout.
Non-Cumulative Fixed Deposit: An FD where interest is paid out at regular intervals (monthly, quarterly, etc.), suitable for those needing regular income.
Flexi Fixed Deposit: Combines features of savings and FDs, allowing partial withdrawals and automatic reinvestment of surplus from linked savings accounts.
NRO/NRE Fixed Deposit: FDs for Non-Resident Indians (NRIs):
- NRO (Non-Resident Ordinary): For income earned in India, taxable.
- NRE (Non-Resident External): For income earned abroad, interest is tax-free in India.
Corporate Fixed Deposits: FDs offered by corporations, generally at higher interest rates than banks, but with slightly higher risk.
Recurring Deposit (RD): Allows depositors to invest a fixed amount monthly, ideal for those who want to build a lump sum over time with consistent savings.
Foreign Currency Non-Resident (FCNR): An FD in foreign currency (e.g., USD, GBP) for NRIs, protecting against currency exchange risk, with interest tax-free in India.
Green Fixed Deposit: An FD where funds are allocated to environmentally sustainable projects, allowing investors to support eco-friendly initiatives.

Each type of FD/RD offers unique benefits tailored to different financial goals, tax benefits, liquidity needs, and investment horizons.