FD vs RD: Key Differences Explained
Not sure whether to invest in a Fixed Deposit or Recurring Deposit? Use this guide to choose the best option.
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FD vs RD: Comparison Table
| Parameter | Fixed Deposit (FD) | Recurring Deposit (RD) |
|---|---|---|
| Investment Type | Lump sum investment | Monthly deposits |
| Interest Rate | 5.5% – 7.5% p.a. | 5% – 7.25% p.a. |
| Tenure | 7 days – 10 years | 6 months – 10 years |
| Flexibility | Less flexible (one-time deposit) | Highly flexible (monthly savings) |
| Ideal For | Large savings parked for fixed period | Discipline in monthly saving habits |
When to Choose FD?
FD is perfect when you have a large lump sum ready to invest for:
- Safe and steady growth
- Higher interest vs savings account
- Income through monthly/quarterly interest
When to Choose RD?
RD is ideal if you want to:
- Build savings gradually
- Develop disciplined investing habit
- Achieve short-term financial goals