When we talk about risk-free investment, then Bank FD comes to mind, but there is also an option like fixed deposit, which is RD or recurring deposit.
FD and RD are both offered by almost all Banks, but a lot of people are confused when choosing a perfect investment scheme between a fixed deposit and Recurring deposit.
Here are the FD vs RD differences, benefits and calculations.
About Fixed Deposit (FD)
FD is an investment scheme or product that is offered by banks and some financial institutions. A fixed deposit is also known as a term deposit. A FD is like a savings account with higher returns and a lumpsum amount at a fixed interest rate.
Features of FD
- Interest Payouts: You can choose interest payouts as monthly, quarterly, annually or at maturity.
- Interest Rates: For Fixed deposits, interest rates are fixed.
- Tenure – You can invest 7 days to 10 years in a FD.
- Renewal – You can withdraw or renew a FD easily.
- Deposit: The Minimum amount to deposit in FD is, ₹5000, and the maximum is ₹10,00,000.
About Recurring Deposit (RD)
RD is like a FD, but with regular investment, not lumpsum. You can also invest monthly in RD, like SIP. RD is now becoming popular among FD lovers due to fixed-interval deposits. RD is offered by almost all banks.
Features Of RD
- Deposit – You can invest monthly in recurring deposits like SIPs.
- Interest Rates – RD offers good interest rates, but is lower than FD.
- Tenure – You can invest 6 months to 10 years in RD.
- Renewal – Like FD, RD also offers renewal at the time of maturity.
- Deposit: The Minimum amount to deposit in RD is ₹100 and the maximum is ₹10,00,000.
The minimum amount of some banks may be ₹10,000 in Fixed Deposit, but most starts with, ₹5000.
Tax On FD Vs RD
- FD – If the interest amount exceeds 10,000 in a financial year, Then TDS will be deducted.
- RD: Interest on RD is also taxable, but there is no any TDS deduction, Tax on RD is applicable from Tax slab.
FD Vs RD Interest Rates
FD Rates 2024
General Public | Senior Citizen | |||
|---|---|---|---|---|
| Tenors | Existing Rates for Public w.e.f. 15/05/2024 | Revised Rates for Public w.e.f. 15/06/2024 | Existing Rates for Senior Citizen w.e.f. 15/05/2024 | Revised Rates for Senior Citizen w.e.f. 15/06/2024 |
| 7 days to 45 days | 3.50 | 3.50 | 4.00 | 4.00 |
| 46 days to 179 days | 5.50 | 5.50 | 6.00 | 6.00 |
| 180 days to 210 days | 6.00 | 6.25 | 6.50 | 6.75 |
| 211 days to less than 1 year | 6.25 | 6.50 | 6.75 | 7.00 |
| 1 Year to less than 2 years | 6.80 | 6.80 | 7.30 | 7.30 |
| 2 years to less than 3 years | 7.00 | 7.00 | 7.50 | 7.50 |
| 3 years to less than 5 years | 6.75 | 6.75 | 7.25 | 7.25 |
| 5 years and up to 10 years | 6.50 | 6.50 | 7.50* | 7.50* |
RD Rates 2024
| Highest slab rate | 7.10% p.a. (400 days) |
| 1 year | 6.80% p.a. |
| 2 year | 7.00% p.a. |
| 3 year | 6.75% p.a. |
| 4 year | 6.75% p.a. |
| 5 year | 6.50% p.a. |
FD Vs RD Calculations
FD Calculations
- Deposit amount: 180000
- Time:Â 5 Years
- Interest rate (%): 6.5
- Compounding period :Quarterly
Results
- Invested Amount: ₹ 1,80,000
- Maturity Amount: ₹ 2,48,476
- Total Interest Earned: ₹ 68,476
| Period | Invested Amount | Maturity Amount | Interest Earned |
|---|---|---|---|
| 1 Year | ₹ 1,80,000 | ₹ 1,91,988 | ₹ 11,988 |
| 2 Years | ₹ 1,80,000 | ₹ 2,04,775 | ₹ 24,775 |
| 3 Years | ₹ 1,80,000 | ₹ 2,18,413 | ₹ 38,413 |
| 4 Years | ₹ 1,80,000 | ₹ 2,32,960 | ₹ 52,960 |
| 5 Years | ₹ 1,80,000 | ₹ 2,48,476 | ₹ 68,476 |
FD Calculator will help you in checking returns.
RD Calculations
- Monthly Investment (₹): 3000
- Rate of Interest (p.a) (%): 6.5
- Time Period:Â 5 Years
Results
- Invested Amount: ₹1,80,000
- Estimated Returns: ₹32,972
- Total Value: ₹2,12,972
| Period | Invested Amount | Maturity Amount | Interest Earned |
|---|---|---|---|
| 1 year | ₹36,000 | ₹48,256 | ₹12,256 |
| 2 years | ₹72,000 | ₹93,499 | ₹21,499 |
| 3 years | ₹1,08,000 | ₹1,35,917 | ₹27,917 |
| 4 years | ₹1,44,000 | ₹1,75,687 | ₹31,687 |
| 5 years | ₹1,80,000 | ₹2,12,972 | ₹32,972 |
Try RD Calculator to check returns.
FAQ
Are FD And RD Taxable?
Yes, FD And RD Are Taxable asper income tax act.
Where to apply for RD And FD?
You can go in any bank or your own bank to apply in FD and RD.
What is the Tenure of FD and RD?
You can invest for Upto 10 years in FD And RD
