A fixed deposit can be done as a short-term fixed deposit or a long-term fixed deposit interest rates. Both form the part of term deposit. A term deposit is an investment which is made for a fixed term or a fixed rate.

Under fixed deposit, the investor invests their money for a particular amount of time which is predetermined by them. Fixed Deposit is a low-risk investment option or strategy which is a good option to safeguard your amount and earn interests. You can lock in your money which you would have otherwise spent on something unnecessary.


Fixed deposit generally has tenure or duration of 1 to 5 years. Also, there are some financial institutions which provide with 10 years lock-in period.

Long-term investment helps in safeguarding the individual’s funds for a longer duration and increases the amount of interest or returns on their investment amount.

The following are the reasons why the fixed deposit is considered as one of the beneficial and recommended investment option available in the market:

Higher Interest Rates

Fixed deposit with long-term duration provides a higher interest rate. It is one of the critical reasons that the people invest in fixed deposit because of the amount of returns is high. Also, when one compares the small duration or long duration fixed deposit tenure, the long-term fixed deposit earns higher returns.


If one has a bad spending habit and spend their entire funds on unnecessary things, then they should consider locking up their funds.

Fixed deposit is one of the best investment options available in the market to lock your funds for 1 to 5 years or more. Also, there are financial institutions that provide with a lock-in period of 10 years.

Flexible options

There are non-banking financial companies that provide flexible options for investing in fixed deposit. These facilities are generally much more flexible than the ones which are offered by the traditional lending institutions.

The investors can select the payment and interest accumulation based on their preferable maturity duration on the basis of monthly, quarterly, half-yearly or annually.

Building Trust

Long-term investment duration is not just a finance matter, but it also creates a long lasting relationship between the investor and the financial institution. When the investor is ready to commit for a long-term investment, then the financial institution is more considered while taking your case.

There is mutual trust between the financial institution and the investor and they tend to consider your case before anyone else. They also help you when you need them to provide financial assistance the in future.


The schemes attached to the investment in the fixed deposit are favourable. Not only the Government schemes are favourable but also the schemes run by non-banking financial companies (not the new age institutions).

Like for instance, Bajaj Finance Offers Senior Citizen Fixed Deposit scheme where the senior citizens get an added interest rates of 0.5 %.

It is important for the investor to read thoroughly the factors involved in relation to investment in fixed deposit. Also, one must be aware and study about the schemes offered by the different institution, whether it is a Governmental or Non-governmental or banking institution or non-banking financial company.

Leave a Comment