At a glance
| Fixed deposit (FD) | Recurring deposit (RD) | |
|---|---|---|
| How you invest | One lump sum | A fixed amount every month |
| Best for | Money you already have | Building savings from income |
| Interest | Fixed for the term | Fixed for the term |
| Compounding | Usually quarterly | Usually quarterly |
| Tax on interest | Taxable at your slab | Taxable at your slab |
Example at 7% for 5 years
- RD of ₹5,000 a month for 60 months (₹3,00,000 in total) grows to about ₹3,59,664.
- FD of ₹3,00,000 placed on day one grows to about ₹4,24,433.
The FD earns more because the whole amount earns interest for the full five years, while each RD instalment earns interest only from the month it is paid in. Figures use quarterly compounding; your bank's exact amount may differ slightly.
Safety
Bank FDs and RDs are covered by DICGC deposit insurance up to ₹5 lakh per depositor, per bank, including interest.
Try it yourself. Get your own result in seconds with the free Savings Calculator.
Open the Savings CalculatorFrequently asked questions
Is RD interest the same as FD interest?
Banks often offer similar rates, but RD returns are lower in rupee terms because money goes in gradually.
Can I break an FD or RD early?
Usually yes, with a penalty that reduces the interest rate.
Sources
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Written and reviewed by the editorial team at Evavel Private Limited. Found an error? Email care@calculations.one.