Lump-sum compounding vs disciplined monthly savings. Compare tenures, interest yield dynamics, and taxation models to select the right deposit structure.
Lock in large lump-sums at once using Fixed Deposits, or build up capital progressively with Recurring Deposits.
FDs yield slightly higher overall interest since the entire principal earns compounding margins from the start date.
Interest earnings on both FD and RD accounts are fully taxed according to your individual income tax slab rates.
Review the structural differences between these secure bank deposit products:
| Feature | Fixed Deposit (FD) | Recurring Deposit (RD) |
|---|---|---|
| Deposit Type | Lump-Sum (One-time payment) | Installment (Regular monthly payouts) |
| Minimum Investment | Usually starts at ₹1,000 to ₹10,000 | Starts very low (typically ₹100 or ₹500/month) |
| Tenure Structure | Ranges from 7 days up to 10 years | Ranges from 6 months up to 10 years |
| Interest Payout | Paid out monthly, quarterly, or accumulated at maturity | Paid out only as accumulated total at maturity |
| TDS Threshold | Exempt below ₹40,000 p.a. (₹50,000 for senior citizens) | Identical threshold of ₹40,000/₹50,000 p.a. |
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