What is the Difference in a Regular Savings Account and a Fixed Deposit Bank Account?
Saving account allows you to save money either on a short term or long term basis. In a saving account you place your surplus funds with the bank in the realm of capitalization of your principal amount. It keeps your funds safe and offers you a modest interest rate on your deposited funds. The amount you put in the saving account is not capped, you can place as much amount you want. Besides this, there is no fixed tenure mentioned on it. This striking feature of the saving account gives a competitive advantage over fixed deposit account, as you can withdraw money at any time. In time of need, you can access your funds and this gives you a financial flexibility.
While on the other hand, Fixed Deposit account is a specific type in which you deposit your money for a specified tenure against a fixed rate of return, which is agreed with you by the Bank at the time of deposit and is not subject to change for the tenure of deposited money. The interest rate for the fixed deposit is normally higher then the regular savings account. They come up with the minimum tenure of 5 years fixed deposit. It is normally used for the compounding of wealth in a lump sump figure for a fixed time period.
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