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Fixed Deposits (FD) are popular savings schemes offered by banks. Banks usually offer relatively higher returns on FDs than on savings / current accounts. FD is a deposit of a fixed sum of money for a fixed period of time - which can vary anything from a few days to a few years - at a fixed interest rate known at the beginning of investment. Interest is compounded at periodic intervals like monthly, quarterly etc. In India, banks usually do quarterly interest compounding. The original deposit amount together with
FD interest earned is returned to the depositor at the end of the FD maturity date.
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