A fixed deposit refers to an investment scheme that offers greater returns on the principal invested (lump sum amount) in comparison to the usual returns generated from a typical savings account. Unlike most of the other schemes that may be exposed to risks due to the investments in market-linked instruments, the fixed deposits are safe and lead to guaranteed returns. Though there is a lock-in period for the amount invested, the account holders can still withdraw it earlier after paying a small penalty. With limited risks and assured returns, this scheme is ideal for those who avoid taking risks with their investments.