As of 2023, Indians saved over ₹103 trillion across 24.23 million in Fixed Deposits*.
Savings is a time-tested tradition in India. Children save their pennies in piggy banks, mothers stash cash in spice jars, and elders always advocate saving before spending. Financial planning happens for every milestone and goal viz., child’s education, wedding, house purchase, furniture buying, and even retirement.
Safe investment options like Fixed Deposits are carefully evaluated and chosen to grow wealth and fund milestones without any hassle. Trusted by generations of Indian households, Fixed Deposits are one of the most preferred low-risk investment options in India.
What is a Fixed Deposit?
Fixed Deposit is an investment instrument which enables you to earn assured returns on an amount of your choice for a specific period of time. The tenure can range from 7 days and can go up to 10 years. You can choose to receive payouts in a monthly, quarterly or annual frequency, as per your preference.
Major Types of Fixed Deposits
Banks in India offer the following types of Fixed Deposits
· Regular Fixed Deposit – A standard fixed deposit that offers guaranteed returns over a chosen tenure, ideal for safe and steady savings.
· Senior Citizen Fixed Deposit – A fixed deposit designed for individuals aged 60 and above, offering higher interest rates and stable income options.
· FCNR – A term deposit for NRIs to hold funds in foreign currencies, protecting against exchange rate risk and earning tax-free interest in India. ·
· NRE/NRO Fixed Deposit – Fixed deposits for NRIs to park overseas income (NRE) or Indian earnings (NRO), with competitive interest rates and repatriation options.
4 Reasons Why Fixed Deposits are the Safest Investment Option in 2025
According to RBI’s annual report as of June 2025 nearly 46% of Indian households use term deposits**. In this day and age, even as savers transition to become digital savvy investors, Fixed Deposits still hold a special place in their hearts. Here are 4 reasons why.
1. Safe Guaranteed Returns Without Market Risk
Investments like mutual funds and equity may offer high yields, but the returns vary due to risk factors such as market fluctuations and company performance. Fixed Deposits, on the other hand, offer guaranteed returns with complete capital protection. As the fixed deposit interest rate is predetermined, you’ll know exactly how much you’ll earn, without experiencing anxiety over market instabilities.
Additionally, in India, bank deposits up to ₹5 lakh are insured under DICGC (Deposit Insurance and Credit Guarantee Corporation). This means that in unforeseen circumstances, depositors will be protected to up to ₹5 lakhs. This adds yet another layer of safety.
2. Flexible Tenures and Payout Options
Whether you’re saving for your vacation, a laptop upgrade, or an emergency fund, FDs give you full control. You can choose from tenures as short as 7 days to up to 10 years. This versatility allows you to choose FD tenures that match your short-term or long-term financial goals.
Pro Tip1: Use the goal-based savings facility in the Equitas 2.0 Mobile Banking App to plan and save for your goals in advance. You can also book your FD online without opening a Savings Account with Equitas Selfe FD and use UPI to transfer the funds.
Fixed Deposits also come with flexible payout options. This means that you can choose between a Cumulative and a Non-cumulative FD.
Cumulative FD:
With a cumulative FD, the interest earned is not paid out periodically but rather added to the principal amount and compounded at regular intervals (usually quarterly or annually). You receive the entire accumulated interest along with your principal amount at the time of maturity. This payout option comes with higher overall returns compared to a Non-cumulative FD, thanks to the power of compounding.
This is best for people who don’t need a regular income and are looking to maximize their earnings through compounding.
Non-Cumulative FD:
In a non-cumulative FD, the interest earned is paid out at regular intervals throughout the FD’s tenure. These payouts can be monthly, quarterly, half-yearly, or annually, depending on your choice.
This option is best for people who need a regular and stable source of income.
Pro tip 2: You can also try FD laddering, which is investing in several FDs that mature at different times. This technique will provide you easier and more frequent access to funds as each FD matures. You need not break FDs prematurely.
3. Financial Stability Amidst Market Volatility
With the current geopolitical tensions and economic uncertainties, the equity markets face constant fluctuations. In turbulent situations such as this, Fixed Deposits prove to be a secure way to invest by protecting the invested capital and offering assured returns. The predetermined interest rate offers a steady income stream and financial stability.
Pro Tip 3: Adding Fixed Deposits to your investment portfolio is a great way to diversify your portfolio and balance riskier investments.
FDs can also help you in other ways.
If you are in need of urgent funds, you can opt for an Overdraft against Fixed Deposit (ODFD). This is a loan facility where you can borrow money against the funds in your Fixed Deposit without breaking the FD and continue earning interest.
Another way you can use your Fixed Deposit is to link it to your Credit Card. With FD Backed Credit Cards, the FD acts as collateral, allowing you to obtain a Credit Card without a credit score or prior credit history.
4. High Interest Rates for Senior Citizens 2025
At Equitas, you can enjoy some of the highest interest rates on Fixed Deposits in India. As of July 2025, Senior Citizens can enjoy a special interest rate of 7.90% p.a. for FDs for a tenure of 888 days. Resident Indian Individuals, NRE & NRO can get 7.40% interest p.a. for 888 days on FD.
Ready to start your FD journey?
So, if you’re looking for a safe and stable investment option in India, Fixed Deposits are your answer. With guaranteed returns and low risk, FDs can help you balance your portfolio by combining them with high-risk investment options like stocks. Open an Equitas FD online today and enjoy guaranteed and rewarding interest rates!
