The Key Difference Between Term Deposit and Fixed Deposit

Term Deposit vs Fixed Deposit
Feature	Term Deposit	Fixed Deposit
Definition	A deposit made for a fixed term with a bank or financial institution, earning interest over that period.	A type of term deposit where money is deposited for a fixed tenure at a fixed interest rate.
Interest Rate	May vary depending on the term and institution.	Usually a fixed interest rate agreed at the time of deposit.
Tenure	Flexible, can be short or long-term depending on agreement.	Fixed tenure, commonly ranging from 7 days to 10 years.
Premature Withdrawal	May be allowed with penalties or lower interest.	Usually allowed but with penalty and reduced interest.
Interest Payment	Can be paid monthly, quarterly, annually, or at maturity.	Typically paid at maturity or at fixed intervals.
Risk	Low risk as principal and interest are guaranteed.	Low risk; principal and interest guaranteed by the bank.
Purpose	Savings and safe investment for a specific period.	Safe investment with assured returns over a fixed period.
Renewal	May or may not be automatically renewed based on terms.	Usually auto-renewed unless specified otherwise.
Taxation	Interest earned is taxable as per income tax laws.	Interest income is taxable under income tax.