New Delhi, April 20 -- Among the safest instruments in India for short-, medium- and long-term savings, bank deposits are preferred choice for conservative investors seeking government-backed and consistent returns.

Compared to simply parking your money in a savings account, a fixed deposit or FD allows you to allocate a lumpsum amount to a financial institution for a fixed period of time and for a fixed rate of interest. FDs also tend to have higher interest rates than savings accounts.

FDs are great financial tools for saving toward specific goals and can be automated so that deductions from your bank account ensure a neat, fixed amount is set aside each month. At the end of tenure, ranging from 7 days to up to 10 years, you can choos...