An account that gives you a higher interest rate for keeping money in it for a fixed period of time. It is also called a ‘term’ deposit because the money is kept for a fixed term.

Example:
Priya has Rs. 50,000 that she wants to save for her child’s education in five years. She saves it in TD account with fixed interest rate of 6% per annum for a five-years. This means that Priya will earn an interest of 6% per year on her deposited amount of Rs. 50,000. During this period, she cannot withdraw the money from the account without paying a penalty. At the end of the five-year term, Priya will have earned an interest of Rs. 15,702