Fixed deposits (FD) and recurring deposits (RD) are both safe, bank-backed ways to grow savings — the difference is how you put money in. An FD takes one lump sum; an RD takes a fixed amount every month. Here is how they compare over 5 years.
Scenario: 5-year term — an FD of ₹3,00,000 at 7% versus an RD of ₹5,000/month at 6.5%.
Side-by-side comparison
| Metric | FD (₹3,00,000) | RD (₹5,000/mo) |
|---|---|---|
| Maturity value | ₹4,24,433 | ₹3,55,284 |
| Interest earned | ₹1,24,433 | ₹55,284 |
FD (₹3,00,000) vs RD (₹5,000/mo) at a glance
| FD (₹3,00,000) | RD (₹5,000/mo) | |
|---|---|---|
| How you invest | One lump sum upfront | A fixed amount each month |
| Interest rate | Usually slightly higher | Usually slightly lower |
| Best for | Money you already have | Saving from monthly income |
| Liquidity | Premature-withdrawal penalty | Premature-withdrawal penalty |
The verdict
An FD generally earns more on the same total money because the entire amount earns interest from day one, while an RD's later instalments earn for a shorter time. Choose an FD when you already have a lump sum; choose an RD when you want to build savings steadily from your salary. Many savers sensibly use both.
Model your own numbers with the FD Calculator and the RD Calculator.