Fixed Deposits vs Other Investment Options: Which Gives the Best Interest Rates?

When it comes to interest rates, Fixed Deposit Interest Rates are pretty lucrative in our country. More and more people are being pulled towards this investment instrument in order to earn profitable returns in the long run. Moreover, as it offers assured returns, it is considered one of the most opted and low-risk investments for those who are looking to expand their finances.

Apart from a fixed deposit, other investment options, such as corporate or government bonds, may offer higher interest rates than FDs. However, it is pertinent to mention here that these come with higher levels of risk and require a more thorough investment understanding.

What is a fixed deposit?

Also called a term deposit, a fixed deposit is a type of savings account that banks and other financial institutions offer. In this type of investment instrument, the potential investor deposits a lump sum amount of money for a specific period of time, typically ranging from a month to even five years. In return, the financial institution pays you a fixed interest on your principal amount. 

The interest rate offered on a fixed deposit is usually higher than a regular savings account. This is simply because the investor agrees to keep the money with the bank for a fixed time period. This means that the financial institution can use the investor’s money for investment purposes or lend it to other customers, knowing they have a guaranteed funding source for the agreed period. 

What are its advantages?

  1. Guaranteed returns

When you invest in an FD, you need not worry as it offers 100% assured returns. In addition, the rate of interest here is fixed at the time of the investment, and you know exactly how much interest you’ll earn at the end of the term. 

(Tip: You can also use an FD calculator India beforehand to know the exact figures.)

  1. Low-risk 

These are considered one of the most low-risk investments. This is because they offer an assured return on investment, unlike other forms of investments, such as stocks or mutual funds. Moreover, FDs are not subject to market fluctuations. 

  1. Flexible 

FDs have flexible tenure options, which means one can choose the duration. Depending on financial goals and other preferences, it ranges from a few months to several years. 

Is Fixed Deposit the best investment scheme when it comes to interest rates?

Undoubtedly, it is one of the most safest investment options and offers competitive interest rates, which is typically hard to ignore. When we talk about the rate of interest, the prime factor, FDs provide competitive rates, particularly for short-term investments. However, whether Fixed Deposits are the best investment option clearly depends on your financial goals and risk appetite. 

The interest rate offered by such investment options varies depending on certain factors. These include investment tenure, the amount invested, and the prevailing market conditions. Therefore, it is considered a low-risk investment option that is ideal for those who prefer to invest in a safe option with predictable returns. 

Lastly, before investing, it is highly recommended to use tools such as fixed deposit calculator in order to plan your finances accordingly. 


Before investing your hard-earned money, it is crucial to consider your financial goals, risk tolerance, and investment horizon when deciding between an FD and other investment options. It’s always a good idea to consult with a financial expert beforehand!