A Fixed Deposit (FD), also known as a Term Deposit, is a financial instrument offered by banks and other financial institutions that allows individuals to deposit a lump sum amount for a fixed tenure at a predetermined interest rate. It is one of the most popular and low-risk investment options in many countries, including India.

Here are the key features of a Fixed Deposit:

1. Investment Tenure: When opening an FD, the depositor chooses a specific tenure for which the money will be locked in. The tenure can range from a few months to several years, depending on the options offered by the bank.
2. Fixed Interest Rate: The bank offers a fixed interest rate at the time of deposit, which remains constant throughout the tenure of the FD. This rate is generally higher than the interest rate offered on regular savings accounts.
3. Interest Payment: The interest earned on the FD is usually paid at regular intervals, such as monthly, quarterly, or annually, depending on the depositor's preference. Alternatively, some FDs compound the interest and pay it along with the principal amount at maturity.
4. Safety and Security: Fixed Deposits are considered safe and secure investments since they are backed by the deposit-taking institution and are typically insured up to a certain limit (e.g., by the Deposit Insurance and Credit Guarantee Corporation in India).
5. Premature Withdrawal: In case of an emergency, the depositor can withdraw the FD before its maturity date. However, this often incurs a penalty in the form of a reduced interest rate, which can vary depending on the bank's policy.