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Jessy Chandra· 8 years ago
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What is good for savings? Recurring deposit or Fixed deposit?

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Replying to the question above
Updated on07/25/26

Both Recurring Deposits (RD) and Fixed Deposits (FD) are safe savings options offered by banks. The better choice depends on your financial goals and how you want to invest your money.

Choose a Fixed Deposit (FD) if:

• You have a lump sum amount to invest.

• You want a fixed interest rate for a specific period.

• You need predictable returns with low risk.

Choose a Recurring Deposit (RD) if:

• You want to save a fixed amount every month.

• You don't have a large lump sum to invest.

• You want to build a savings habit while earning interest.

In general, an FD is better for investing a one-time amount, while an RD is ideal for disciplined monthly savings.

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Naman Parsai
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Answered on05/08/26

Both Fixed Deposit and Recurring Deposit are safe and popular savings options in India, but the “better” choice depends on your income pattern, financial goals, and saving discipline.

A Fixed Deposit (FD) is ideal when you have a lump sum amount of money and you want to invest it for a fixed period. You deposit the money once, and it earns a fixed interest rate over time. FDs are simple, predictable, and low-risk. You already know how much return you will get at maturity. This makes FDs a good option for people who have savings from bonuses, business profits, or one-time income and do not need that money for a while.

On the other hand, a Recurring Deposit (RD) is designed for people who want to save small amounts regularly. In an RD, you deposit a fixed amount every month for a specific period, and you earn interest on it. This makes RDs very helpful for salaried individuals or students who want to build a habit of saving gradually. It is like “saving discipline in action.”

In terms of returns, both FD and RD usually offer similar interest rates, depending on the bank. However, FD returns may feel slightly higher in practice because the full amount is invested from the beginning, allowing it to earn interest for a longer time. In RD, money is added monthly, so each installment earns interest for a shorter duration.

Liquidity is another difference. FDs can sometimes be broken early, but with penalties. RDs are also flexible, but missing monthly payments can lead to penalties or reduced interest. So both require some level of commitment.

Taxation is similar for both, as interest earned is taxable under Indian income tax rules. Neither FD nor RD is completely tax-free unless it falls under specific tax-saving FD schemes.

In conclusion, FD is better if you already have a lump sum and want stable, predictable growth. RD is better if you want to build savings step by step with regular monthly discipline. Ideally, many people use both—FD for long-term savings and RD for building financial habits. The best choice depends on your income flow and personal saving style, not just which one gives “more” return.

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Michael Jons
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Replying to the question above
Answered on07/15/20
For your situation, since you are talking as far as loan fees and a similar residency for both, a fixed store is increasingly advantageous. Putting resources into a FD (Fixed Deposit) or a RD (Recurring Deposit) is helpful as both these monetary instruments are known to be secure while likewise giving guaranteed returns.
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Gopi Seo
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The latest sensation, Artificial Intelligence is said to have the capability of ending poverty in the world. And of many ways that can happen, including the role it can play in the education sector.

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Prreeti Radhika Taneja
Prreeti Radhika Taneja
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Replying to the question above
Answered on06/08/20
While in repeating stores you have to store a sum each month for a fixed timeframe and the intrigue will be given toward the finish of your picked timespan. ... In FD the yearly financing costs are higher than the month to month loan fees. Along these lines, it is smarter to contribute for a more drawn out residency.
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info applogram
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Answered on04/30/20
First consider what is your desires from bank account..According to your need ,select your bank …

a few choices are:-

1. Kotak Mahindra Bank (Highest Saving Interest Account)

Kotak Mahindra bank offers one of the most elevated sparing record financing cost in India. You would get up to 6% financing cost on your sparing record. Indeed, even the FD loan cost of SBI, HDFC and ICICI goes between 6 to 7%.

So you can procure roughly the equivalent fixed store financing cost on your sparing record without locking your cash.

Kotak 811 Digital Bank is extraordinary compared to other sparing records gave by Kotak bank. 811 is a zero equalization sparing record that you can open online through your portable or PC.

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mudas saraziz
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Answered on04/21/19
Under fixed deposits a person need to deposit a fixed amount for a specified period and a fixed rate of interest would be paid on it. You cannot withdraw before the final maturity , however if there is an emergency that you need funds and you break your FD then you will have to forego a huge amount.
For eg: Mr A planned to deposit ₹100000 for a period of 5 years. The interest would be paid at 8% per annum. This is a case of fixed deposit.

Recurring deposit: Under this scheme, you need to invest or deposit a specified sum of money at a regular interval. The interest rate would be fixed as well as the amount of installment. The maturity time is also fixed but breaking the RD also leads to high opportunity cost of interest.
For eg: Mr A plans to deposit ₹500 per month for a period of 3 years. The interest would be paid at 8% per annum. But the interest is paid as compounded annually.




FD is better than RD if rate of return is to be considered. Because the interests in earned on a huge amount rather than earning on installments.
However if the person doesn't have a huge amount and is a regular earner , he may opt for RD.
The maturity period of FD is large and thus is a highly risky in case an emergency arises. In that case RD is much better option.



Thus it all depends on the financial situation of a person and the financial risk that a person can bear. Fixed deposit may be good for a person and it may not be a good option for the other person. So it is not always that FD is better than RD , though it is in terms of rate of return but other things and factors need to be taken into consideration. Like market conditions if the market is down you won't invest huge some into FD and thus RD is a better option.

So all factors need to be taken care of while deciding which one is the better option considering the real current situations.
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Mayank Gupta
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Replying to the question above
Updated on07/31/18

Fixed deposit and recurring deposit, both are good options for safe investment and both are are fixed income products. But when you compare the two, FD scores higher than a RD because of the returns you get.

For the invested amount, banks pay you a fixed interest at a specific frequency till the term or on maturity. If compared for the higher profits, a FD fetches you more income than a recurring deposit.

Even in case you put in the same amount, FD will always offer you a better profit because it will remain in the bank for a longer time. Therefore, it will offer you 9% rate of interest from the beginning, whereas in recurring, you will put in the money in a monthly format.

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Lara Gomes
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