The basic mechanics

You deposit a lump sum with a bank or financial institution for an agreed term (e.g. 3, 6, or 12 months), and in exchange, the institution pays a fixed interest rate for that period, typically higher than a standard savings account rate.

Fixed means fixed

Both the interest rate and the term are locked in when you open the FDR. Your return is predictable and doesn't change with market conditions during the term, unlike investments such as stocks or funds.

Early withdrawal

Withdrawing before the term ends usually triggers a penalty — often a reduced interest rate or a fee — so FDRs work best for money you're confident you won't need before maturity.

Interest payment options

Some FDRs pay interest periodically (e.g. monthly or quarterly), while others pay all interest at maturity along with your principal. Check which structure a given product offers if regular income matters to you.

Comparing FDR products

Rates vary by institution and term length. This app's Investments → FDR section lists FDR products from multiple institutions so you can compare rates before committing funds.