What is the Difference Between Cumulative & Non-Cumulative Fixed Deposit - Loan Trivia

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Sunday, 9 April 2017

What is the Difference Between Cumulative & Non-Cumulative Fixed Deposit

A fixed deposit is a type of savings account where you earn a high fixed deposit interest rate and your principal amount will remain safe and secured for the entire tenure. Nowadays almost every bank and NBFC provide service of Fixed Deposit. FD services is majorly divided in 2 types:

  • Cumulative Fixed Deposit
  • Non-Cumulative Fixed Deposit



Non-Cumulative Fixed Deposit:. This type of fixed deposit is good if you want a regular income from your savings. But, a non-cumulative FD pays a lesser interest rate. So, you may gain a little lesser than a long-term investment scheme. Still this is better when you key focus is earning interest at regular interval.

Cumulative Fixed Deposit: In Cumulative Fixed Deposit  you will get the money and interest together over a set time of period. The interest rate is usually higher in Cumulative fixed deposit as compared to non-cumulative but you will not receive monthly interest in this type of FD service. 

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