Fixed deposit is investment instruments offered by banks and non-banking financial companies, where one can deposit money for a pre fixed rate of interest. The deposit period and Interest rate varies from various companies and various kind of deposits within the same company or bank. The deposit rates varies depending upon the credit rating of the issuing bank or company.
Corporate and NBFC fixed deposits are unsecured. Unlike the popular belief, Fixed Deposits are not the safest investment options. Bank deposits holders are insured to the extent of Rs.1 lac per deposit holder. Since Banks are also regulated by RBI, the level of safety improves.