A fixed deposit (FD) is a popular financial instrument offered by banks and financial institutions. It's a low-risk savings option where individuals deposit a lump sum for a predetermined period, typically ranging from a few months to several years. In return, the bank pays a fixed interest rate, often higher than regular savings accounts.

Key features of fixed deposits include:

1. Fixed Interest: The interest rate is fixed at the time of deposit and remains constant throughout the tenure, providing predictability for returns.
2. Tenure Options: Investors can choose the FD tenure based on their financial goals, ranging from short-term to long-term deposits.
3. Safety: FDs are considered safe investments because they are typically insured up to a certain limit by government deposit insurance schemes.
4. Interest Payment Frequency: Interest can be paid out periodically (monthly, quarterly, semi-annually, or annually) or at maturity, depending on the investor's preference.
5. Premature Withdrawal: While fixed deposits are meant to be held until maturity, many banks allow premature withdrawals, but this may result in a lower interest rate.
6. Auto-Renewal: At maturity, FDs can be auto-renewed if the investor doesn't need the funds, ensuring continuity of the investment.
7. Nomination Facility: Investors can nominate a beneficiary to receive the proceeds in case of their demise.

Fixed deposits are an excellent choice for risk-averse individuals looking to preserve and grow their savings over a defined period. They are suitable for both short-term financial goals and long-term wealth accumulation. However, they may offer lower returns compared to riskier investment options like stocks or mutual funds. It's essential to compare interest rates across banks, consider tax implications, and choose a tenure that aligns with your financial objectives when investing in fixed deposits.