Introduction
Both Fixed Deposits (FDs) and Recurring Deposits (RDs) are great savings options. Let’s compare them to help you choose the right one.
What is a Fixed Deposit (FD)?
- A lump sum amount is deposited for a fixed tenure.
- Higher interest rates than savings accounts.
- Premature withdrawal may have penalties.
What is a Recurring Deposit (RD)?
- Regular monthly deposits instead of a lump sum.
- Interest is similar to FDs but slightly lower.
- Good for salaried individuals who want disciplined savings.
Comparison Table: FD vs. RD
| Feature | Fixed Deposit (FD) | Recurring Deposit (RD) |
|---|---|---|
| Deposit Type | Lump sum | Monthly installments |
| Interest Rate | Higher | Slightly lower than FD |
| Tenure Flexibility | Fixed duration | Fixed duration |
| Withdrawal Rules | Penalties on early withdrawal | Penalties on early withdrawal |
Which One Should You Choose?
- Choose FD if you have a lump sum amount and want better returns.
- Choose RD if you want to save regularly and build a habit of disciplined savings.
Conclusion
Both FDs and RDs have their advantages. Select based on your financial goals and saving habits.
