Fixed Deposits:

Fixed deposits (FDs), on the other hand, are a low-risk investment option offered by banks and financial institutions. In a fixed deposit, an individual deposits a lump sum of money for a specified period at a predetermined interest rate. At the end of the term, the principal amount, along with the accumulated interest, is returned to the investor. FDs are favored for their safety and predictable returns, making them an ideal choice for conservative investors seeking steady income without exposure to market risks.

While insurance focuses on protection, fixed deposits emphasize capital preservation and income generation, making both essential elements of a balanced financial strategy.

Bonds:

Bonds and fixed deposits are both debt instruments used by corporations and governments to raise capital from investors. Bonds are typically secured by specific physical assets, meaning the bondholder has a claim on these assets if the issuer defaults on the payment.

Bonds also often come with a fixed interest rate, known as the coupon rate, which is paid to investors at regular intervals until maturity. Upon maturity, the principal amount is repaid.