Fixed deposits (FDs) are a popular investment choice for conservative investors seeking stable returns. They come in two forms: cumulative and non-cumulative. Cumulative FDs reinvest interest, making them suitable for those who do not need immediate income, while non-cumulative FDs provide regular payouts, appealing to retirees who depend on interest for living expenses. In India, major banks like HDFC Bank, State Bank of India (SBI), ICICI Bank, and Axis Bank offer FD interest rates ranging from 6% to 7.25%, with senior citizens often receiving an additional 0.5%. For example, investing ₹50 lakh in a cumulative FD at a 7% annual return could yield nearly ₹1 crore after 10 years through compounding. Conversely, non-cumulative FDs require larger investments to generate desired monthly incomes; for instance, an investment of about ₹20 lakh at 6% interest is needed to secure ₹10,000 monthly. Taxation on FDs is similar for both types, but the timing of interest payouts affects how taxes are reported. Understanding these distinctions helps retirees and investors make informed decisions about their financial futures.