In India, a fixed deposit is a basic tool for customers to invest money in banking. A fixed deposit is an amount that is locked for a fixed tenure and for the rate that is given by the bank to customer, and customer is agree for that tenure and rate of interest too. At the end of the period customer gets the total amount with principal and earned interest, if any.
Customer can book or invest in a FD for minimum for 7 days to maximum 10 years or more. At the time of booking of FD banks is promise to pay to customer the rate of interest. It is a guaranteed-return investment which is not directly affected by stock market but the rate of FD is depend upon the repo rate decided by RBI.
If we booked the FD and after that in some days FD rates fall then that situation doesn’t affect to our FD. Because the rate of interest of your FD is fixed when you book the FD. Customer have his own decision to take the interest, monthly, quarterly, half yearly or yearly, also he/she can opt for reinvest that amount with interest too.
if we booked the FD and after that we are in need of money for less time then we can ask to the bank for Loan against FD which is available on just of some nominal amount.