A fixed deposit may be a current or non-current asset for accounting purposes. Fixed deposits invested in banks for less than one year are current assets. Fixed deposits invested in banks for longer than one year are non-current assets. A current asset is any asset that will provide an economic benefit within one year. A fixed deposit is a product offered by banks whereby interest earned on funds in the deposit is fixed and will not change with fluctuating interest rates.
Is Fixed Deposit a Non Current Asset? FAQs
A fixed deposit may be a current or non-current asset for accounting purposes.
Fixed deposits invested in banks for less than one year are current assets.
Fixed deposits invested in banks for longer than one year are non-current assets.
It is important to remember that investments in fixed deposits are not without risk. The interest rate of the deposit may fall, resulting in a lower return than originally anticipated. Additionally, there is always the risk that the financial institution holding the deposit could default and cause losses to investors.
Fixed deposits are used by individuals and businesses to earn interest income on their available funds.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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