What is Green FD, how is it different from normal fixed deposits?

We all rely on fixed deposits for safe investment. But now a new term Green FD has also come. So what is Green FD and is it also a safe investment option?

Whenever it comes to safe investment, the first thing that is discussed is Fixed Deposit (FD). In simple language, it means depositing lump sum money in the bank and earning interest on it. Since the returns may be low but guaranteed, it is considered the safest option. But now 'Green FD' has also come in the market.

What is Green FD? How is it different from normal FD and is the investment made in it also safe? Let us understand the whole story…

What is Green FD?

In fact, as environmental awareness is increasing in the world, the need for investment in this sector is also increasing. The concept of Green FD has emerged from this thinking. The money invested in Green FD is used to save the environment. That means, the amount deposited in this segment is invested only in those projects which work to protect the environment.
In a way, you can consider it as 'investment with a purpose'.

How is it different from common FD?

Green FD also works on the same principal as normal FD. In a normal FD, you enter into a contract with the bank for a fixed amount for a fixed time. Green FD just goes one step further. In this you also commit that your money will be invested only in environment related works, such as solar power plant, pollution reduction or sustainable farming practice etc.

Who can invest?

Anyone can invest in Green FD like ordinary citizens. From individuals to HUF, proprietorship, even RWAs, clubs and NGOs etc. can invest in it.

Benefits of investing in green FD?

The advantage of investing in Green FD is that, firstly, it provides money for projects requiring environment. Diversifies your portfolio as an investor. At the same time, it also gives you the satisfaction that you are doing something to protect the environment. In this you also get returns like FD.