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In a Fixed Deposit, the sum of money is blocked for the period of the deposit. Banks allow depositors the flexibility to invest their funds from periods as low as 7 days to 10 years. The interest rate on the deposit depends on the period for which the funds are placed with the bank. Similarly, non-banking finance companies (NBFC’s) are authorised to mobilise funds from individuals through Fixed Deposits. NBFC’s usually offer a slightly higher return on their FD’s as they tend to lend more aggressively.