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Banking guide

FD vs RD: fixed or recurring deposit?

Both are safe, bank-backed savings that pay a fixed rate. The difference is how you put money in: a fixed deposit takes one lump sum today, a recurring deposit takes a fixed amount every month.

A worked example: ₹1.2 lakh at 7% for a year

Deposit ₹1.2 lakh as an FD today, or ₹10,000 a month into an RD for 12 months (also ₹1.2 lakh in total):

DepositYou put inInterest earned*
FD (₹1.2L today)₹1,20,000≈ ₹8,600
RD (₹10k/month)₹1,20,000≈ ₹4,500

The FD earns more because the whole ₹1.2 lakh earns interest for the full year, while RD instalments only start earning as you pay them in. *Both compounded quarterly at 7%.

When an FD fits

You already have a lump sum — a bonus, maturity proceeds, or savings sitting idle — and want it to earn the most over a fixed term.

When an RD fits

You are saving from monthly income and want a disciplined habit. An RD turns "I'll save what's left" into an automatic fixed deposit every month — perfect for building an emergency fund or a short-term goal.

Check your own deposit

See exactly what an FD or RD would mature to.

FD Calculator →RD Calculator →

Frequently asked

Does an FD earn more than an RD for the same money?
Yes, usually — in an FD the full amount earns interest from day one, while in an RD each instalment only earns interest from the month you deposit it. For the same total and rate, the FD ends slightly higher.
Are FD and RD interest rates the same?
Banks usually offer similar rates for FDs and RDs of the same tenure, so the difference in returns comes mainly from when your money starts earning, not the rate.
Is deposit interest taxable?
Yes. Interest from both FDs and RDs is added to your income and taxed at your slab. Banks deduct TDS once interest crosses ₹40,000 a year (₹50,000 for senior citizens).

Illustrative figures at 7% p.a., quarterly compounding; bank rates vary. Estimates for planning, not financial advice.