The deposits that are maintained for a certain time period at a certain interest rate
are known as fixed deposits. This deposit system is important as a way to deposit
excess money and as a safe investment opportunity. There are several characteristics
of a fixed deposit. They are,
# Maintaining the deposit for a certain period of time.
# Varying interest rates depending on the amount deposited and the deposit period.
# Receiving a relatively higher interest rate compared to normal savings accounts.
# A certain percentage of the fixed deposit can be obtained as a loan by
providing the fixed deposit as a collateral.
# Interest will be accumulated monthly, at maturity or as per the agreed terms.
# Bank gives a certificate mentioning the details such as the deposit date,
deposited amount and maturity date.
Opening a fixed deposit
When opening a fixed deposit, a duly completed fixed deposit mandate, deposit slip,
Know Your Customer (KYC) form and a tax declaration form should be submitted
along with the national identity card to the bank. When all these requirements are
fulfilled, the bank issues a deposit certificate to the customer.
