Fixed Deposit

With a 3.61% inflation rate and 6.75% fixed deposit interest, it would be profitable for you.

Investing ₹166,000 at 6.75% for 5 years will yield ₹59,362.50 in interest, totaling ₹225,362.50. Whether the sum buys more depends on the average inflation over the next 5 years. If inflation averages higher than 3.14%, the purchasing power will be less.

I haven't used AU's FDs, but they offer 7.25% interest on 12-month deposits. You'd get about ₹725 on ₹10,000, or ₹7,250 on ₹100,000. They have easy online access, different deposit lengths, and better rates for seniors, which could be good for short-term savings.

Almost all the banks give the same rate of interest on RDs but here are the top five banks that are best for opening an RD account:
Yes Bank: Provides 7.75% of interest rate.
SBI Bank: Provides 7.0% of interest rate.
IDFC First Bank: Provides 7.50% of interest rate.
Kotak Mahindra Bank: provides 7.10% of interest rate.
RBL Bank Bank: provides 7.50% of interest rate.

For Senior Citizens:

Yes Bank: Provides 8.25% of interest rate.
SBI Bank: Provides 7.50% of interest rate.
IDFC First Bank: Provides 8% of interest rate.
Kotak Mahindra Bank: provides 7.60% of interest rate.
RBL Bank : provides 8.0% interest rate.

Both long-term FD and short-term FD have their advantages and features according to the financial goals.
Short-term FD:
In short-term FD you can invest for a short period (a few days to two years) only. Also, it is good for short-term liquidity needs you can access your money whenever you need.
Long-Term FD:
In long-term FD you can invest for a long period (5 to ten years). Long-term FD provides higher interest rates and is good for long-term financial goals.
So, both long-term FD and short-term FD have their own benefits. If you want higher interest returns then long-term FD is a good option. And, If you have liquidity needs shortly then short-term FD is a good option.

Yes, you can easily get the loan against your FD from the bank. Most banks can give 90–95% of a loan with your FD value at a lower interest rate than other types of loans. Every bank offers the loans on FD, but the terms and conditions may vary. So read the terms carefully.

The maturity amount depends on the tenure. Longer tenures provide better interest rates; keep in mind that holding your money for a longer period lowers liquidity. Consult your bank to determine the exact maturity value based on the term you have selected.

There is 1% penalty on the applicable interest rate for early withdrawal of FD below ₹3 crore. Basically, the penalty amount depends on the deposit duration and withdrawal terms.

You can get benefits from compound interest on your FD by choosing cumulative FD which means you can reinvest the interest which you earned on your FD.

It's a very good idea to get more profit by upgrading to higher-rate FDs. But check with your bank whether up-gradation is available or not. But when you are upgrading, evaluate all the terms and penalties related to the new FD.