Cumulative Vs Non-Cumulative Fixed Deposit | Which Provide Compounded Interest? | Namita

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A fixed deposit gives guaranteed returns in the form of interest and is one of India's safest and most well-liked investment options. A fixed deposit is divided into cumulative and non-cumulative categories based on how often interest is paid out. In a cumulative fixed deposit, interest is paid to the holder in one big payment at maturity. On the other hand, good is consistently delivered to the investor in a non-cumulative fixed deposit. This article outlines the critical distinctions between cumulative and non-cumulative fixed deposits to assist you in selecting the option that is best for you.

The interest on a cumulative fixed deposit is compounded either every quarter or every year, and it is accumulated until maturity. After the term, the principal amount and the interest are paid together. Each year's appeal is added to the principal amount. A cumulative fixed deposit is a good choice for people who do not depend on interest-based income. If you desire a steady income, especially as you age and retire, a non-cumulative fixed deposit is an excellent option. In other words, this is the best option if you desire a steady income from your money.

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