Guides / FD vs RD: Which Is Better for Your Savings?
FD vs RD: Which Is Better for Your Savings?
1 Oct 2026Both are safe, bank-based options. The difference is how you put money in.
Fixed deposit (FD)
You deposit a lump sum once. Example: ₹5 lakh at 7% for 5 years with quarterly compounding grows to about ₹7.07 lakh. Use the FD Calculator.
Recurring deposit (RD)
You deposit a fixed amount every month. Example: ₹10,000 a month at 6.5% for 5 years grows to about ₹7.10 lakh on ₹6 lakh invested. Use the RD Calculator.
Quick comparison
| FD | RD | |
|---|---|---|
| Money goes in | Lump sum | Monthly |
| Best for | Idle savings | Building a habit |
| Interest | Fixed for the term | Fixed for the term |
Points to remember
- Interest is taxable at your slab rate, and banks may deduct TDS above a limit.
- Rates differ between banks and change over time.
- Breaking early usually costs a penalty.
- After tax, FD and RD returns may be close to or below inflation, so keep them for safe goals and not long-term wealth.