FD vs RD — Which Is Better?
Lump sum or monthly instalments? Compare returns, flexibility, tax and use-cases of fixed deposits and recurring deposits with a side-by-side calculator.
Updated 30 September 2026 · 25 banks trackedWhat you need to know
An FD suits money you already have; an RD suits money you will save every month. For the same rate and tenure an FD earns more because the entire amount earns interest from day one, while RD instalments earn interest only from the month they are paid.
FD vs RD at a glance
| Feature | Fixed Deposit | Recurring Deposit |
|---|---|---|
| Investment | One-time lump sum | Fixed monthly instalment |
| Tenure | 7 days – 10 years | 6 months – 10 years |
| Rate | Same card as FD at most banks | Usually same as FD for that tenure |
| Interest | Full amount earns from day one | Each instalment earns from its deposit date |
| Missed payments | Not applicable | Penalty; RD may close after repeated defaults |
| Tax & TDS | Slab rate; TDS above threshold | Same |
Example
| FD (lump sum) | RD (monthly) | |
|---|---|---|
| Total invested | ₹3,60,000 at once | ₹10,000 × 36 months |
| Maturity @ 6.5% | ₹4,36,827 | ₹3,98,244 |
| Interest earned | ₹76,827 | ₹38,244 |
The FD earns more because the full ₹3.6 lakh is invested from day one. If you do not have the lump sum today, the RD is the way to build it.
Calculator
Frequently asked questions
Which gives more interest, FD or RD?
For the same total amount and rate, an FD gives more because the whole sum is invested from the start.
Can I do both?
Yes — many people keep an RD for monthly savings and move the RD maturity into an FD.
Information is for education and comparison. Rates and rules change — confirm with your bank and a tax adviser before investing. FinancePortal is not a financial or tax adviser.