What do you mean by term deposits?
Term deposits are deposits which are accepted for definite period of time. They are also called as time deposits.
In India, the following categories of term deposits are accepted from the public – fixed deposit, recurring deposit and reinvestment deposit
In the case of fixed deposits, the minimum period for accepting deposits is seven days and the maximum period for acceptance is ten years. Interest is paid according to the period of deposit as decided by the respective banks. Interest is normally paid on quarterly and in case of demand by the depositor, it is also paid on monthly basis.
In the case of recurring deposit, the minimum period of deposit is six months and the maximum period for acceptance is ten years and in this type of deposit, deposit is accepted in monthly instalments and on maturity, the amount invested is repaid to the depositor along with interest due.
Reinvestment deposits are similar to fixed deposit; however, in this case, the amount along with interest is paid on maturity and as such the depositor gets additional interest on account of interest reinvested
