Term deposit is an account used for depositing our customer’s money for a fixed period with the bank. In return they earn interest at higher rate than savings account, as they deposit money for a fixed period. Furthermore, there is also provision of withdrawing the money before due date.
Broadly, there are two kinds of basic term deposits viz. fixed deposits and recurring deposits.
The main purpose of fixed deposit account is to enable the individuals to earn a higher rate of interest on their surplus funds. Similarly, recurring deposits provide a systematic way for long term savings option for customers.