Which gives better returns: FD or RD?

FD gives slightly better returns because you earn interest on the full amount from day one. With RD, later installments earn interest for less time.

Can I do both FD and RD?

Absolutely! Use RD for monthly savings and FD when you have lump sums. They complement each other well.

Are FD and RD insured?

Yes, both are covered by DICGC insurance up to ₹5 lakh per depositor per bank.

FD vs RD: Fixed Deposit or Recurring Deposit?

Compare Fixed Deposit and Recurring Deposit to find which savings instrument suits your needs.

Criteria	Fixed Deposit (FD)	Recurring Deposit (RD)
Investment Type	Lump sum	Monthly installments
Returns	Slightly higher (compounding on full amount)	Slightly lower (staggered deposits)
Flexibility	One-time investment	Builds savings habit
Minimum Amount	₹1,000 - ₹10,000	₹100 - ₹500/month
Premature Withdrawal	Allowed with penalty	Allowed with penalty
Tax Treatment	Interest taxable at slab rate	Interest taxable at slab rate

Our Verdict

FD is better when you have a lump sum to invest. RD is ideal for building a savings habit with monthly contributions. FD gives slightly better returns on the same total investment due to compounding on the full amount from day one.

Detailed Analysis

Fixed Deposits and Recurring Deposits are both safe, guaranteed-return instruments offered by banks. The main difference is how you invest: lump sum (FD) vs monthly (RD).

FD locks in a lump sum at a fixed interest rate. You earn interest from day one on the full amount, so the effective yield is higher. FDs offer flexibility in tenure (7 days to 10 years) and are ideal for parking surplus cash.

RD is perfect for salaried individuals who want to save a fixed amount monthly. It enforces discipline and is great for short-term goals. However, since deposits are staggered, the effective return is slightly less than FD for the same total amount.

FD vs RD: Fixed Deposit or Recurring Deposit?

Our Verdict

Detailed Analysis

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