"Why FD is not risk free?"
There is nothing that is truly risk-free.
FD is very low risk. But not zero risk.
What if something happens to the bank? What if the bank shuts down or goes bankrupt?
A few years ago when the PMC bank fiasco occurred, depositors were not able to access their own FDs for quite some time.
Of course, the risk varies from bank to bank.
An established bank is far less likely to have problems when compared to a smaller or newer bank.
This is why some new banks offer very high interest rates. They’re compensating for the higher risk.
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