A fixed deposit is a type of bank account where you save money with a bank for a set period of time (a ‘term’) such as 3, 6, 12 or even 60 months. In return, the bank pays you a fixed rate of return at the end of that term (when it ‘matures’). Fixed Deposits are best used as a short to medium term option for saving your money or to keep cash aside for emergencies.