ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The deposited amount will be locked in. This is a freely negotiable investment. On the other hand, a Fixed Deposit FD is a type of investment option provided by banks and other non-banking financial companies. This instrument provides a higher interest rate to the investor than the normal savings account.

Detailed explanation-2: -Fixed deposit provides highest rate of interest as a large amount of money is deposited in this account for a longer duration.

Detailed explanation-3: -A Certificate of Deposit (also known as a CD, COD, or Time Account) is a financial product that usually pays a fixed interest rate for a set period of time, ranging from a few months to several years. This period of time is known as a “term.”

Detailed explanation-4: -CDs issued by financial institutions have a term period ranging from 1–3 years. Similar to dematerialized securities, CDs in dematerialized forms are transferable through means of endorsement or delivery. There is no lock-in required for a CD. One cannot issue a loan against a CD.

Detailed explanation-5: -Share. A certificate of deposit (CD) is a low-risk savings tool that can boost the amount you earn in interest while keeping your money invested in a relatively safe way.