A fixed deposit is the most trending platform for investment. It is a very safe and secure type of platform where an individual can invest without any doubt. Due to its flexibility, tax benefits, security, and easy withdrawal, this is always in the line of favorites investment platform.
A fixed deposit basically is of two types, One is cumulative and the other is non-cumulative.
Let us discuss both the types one by one and then we will come to the division which is the best one for us.
Cumulative Fixed Deposit: In this type of fixed deposit you invest an amount for a time period between 6 months to five years and the FD interest rate will be given to you by the lender timely as you decided at the initial point. The amount will be returned to you at the time of maturity will the principal amount.
Non-cumulative FDs: In this type of FD you will get the interest rate according to your time period. If you choose monthly payouts then there will be proper monthly cash flow you will get it can be yearly weekly as you opt for the interest rate.
Both types of FD has there own importance depending upon the investor's need. If the investor wants to invest for the long period then go for cumulative but if he wants for the short term then go for non-cumulative.
