FD vs RD Comparator
Compare the terminal wealth generated by a one-time capital placement against a structured periodic saving timeline.
Related Calculators on FinCalcs
After using this calculator, explore these related tools to further optimize your financial planning:
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RD Calculator
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Compound Interest Calculator
Understand the compounding difference
PPF Calculator
Compare FD and RD with PPF.
Savings Goal Calculator
Choose the right instrument for your goals.
FD Ladder Calculator
Build a ladder combining FD and RD.
What Is the FD vs RD Comparator?
Fixed Deposits and Recurring Deposits are two popular savings instruments offered by banks, each suited for different financial situations. Our FD vs RD Comparator helps you decide which option is better for your specific needs by comparing returns on equivalent investment amounts.
FD requires a lump sum invested upfront for a fixed term, while RD allows monthly contributions to build towards a target amount. The key difference is when you invest the money. In an FD, your entire principal starts earning immediately. In an RD, each monthly instalment earns interest for a shorter period, so the total return is lower for the same total investment at the same rate.
Anyone deciding between investing a lump sum or building savings gradually, whether for short-term goals or emergency funds, will benefit from this clear comparison.
How to Use This Calculator
Enter the total investment amount
For FD, this is the lump sum deposited. For RD, this is the total of all monthly deposits.
Set the tenure in months
Choose the investment period. Both FD and RD can be compared over the same period.
Enter the interest rate for both
FD and RD may have different rates. Enter the applicable rates offered by your bank.
Review the comparison
See maturity amounts, total interest earned, and effective returns for both options.
Adjust parameters to find the better fit
Change amounts and tenures to see which instrument works best for your situation.
Real-World Example
Meet Amit. He has 1,20,000 saved and wants to invest for 12 months. He is deciding between putting it all in an FD at 6.5% or saving it through an RD at 6% with monthly deposits of 10,000.
Using the FD vs RD Comparator:
Total Investment
1,20,000
Tenure
12 months
FD Rate
6.5%
RD Rate
6.0%
FD Maturity Amount
1,27,800
RD Maturity Amount
1,23,900
Difference
3,900 more in FD
Amit sees that FD earns more because the entire principal is invested from day one. However, since he does not have the full 1,20,000 in hand and saves monthly, RD is his only practical option. The calculator helps him understand the trade-off between lump sum availability and monthly savings discipline.
The Mathematics Behind FD vs RD Comparison
FD uses compound interest on a lump sum, while RD uses the future value of annuity formula with each monthly deposit earning for a different period:
Frequently Asked Questions
In FD, the entire principal earns interest for the full term from day one. In RD, only the first instalment earns interest for the full term; each subsequent instalment earns for less time.
Choose RD when you do not have a lump sum but can save monthly. RD instils saving discipline and is ideal for salaried individuals building towards a future goal.
Yes. Many banks offer different rates for FD and RD. Senior citizens may get higher rates on both. Always check current rates before deciding.
Generally yes, for the same rate and tenure. FD earns more because the full amount is invested from day one. However, consider penalties for premature FD withdrawal if you may need the money early.
Both FD and RD interest are taxed as per your income tax slab. TDS is deducted at 10% if interest exceeds 40,000 in a year. Both are treated similarly for tax purposes.
Yes, for the same interest rate and tenure, FD always yields a higher maturity amount because the entire principal earns interest from day one. Rs 1.2 lakh FD at 6.5% for 12 months gives Rs 1,27,800 while a Rs 10,000/month RD at 6.5% gives Rs 1,24,200.
For RD to match FD returns on the same total investment and tenure, RD needs a significantly higher rate. For Rs 1.2 lakh over 12 months at 6.5% FD rate, you need approximately 11.8% RD rate to match the FD maturity amount.
Yes, a common strategy is to use RD for 1-2 years to accumulate a corpus, then transfer the maturity into a long-term FD. Save Rs 25,000 monthly in an RD for 2 years, then invest the Rs 6.3 lakhs maturity into a 5-year FD at a higher rate.
Small finance banks lead in both. Suryoday SFB offers FD up to 8.5% and RD up to 8%. Equitas SFB offers FD up to 7.75% and RD up to 7.5%. Among major banks, Kotak Mahindra, IDFC FIRST, and DCB Bank offer competitive rates on both instruments.
Both are treated identically for tax purposes. TDS at 10% is deducted if total interest exceeds Rs 40,000 (Rs 50,000 for senior citizens). Interest is added to your income and taxed per your slab. Form 15G/15H can avoid TDS if income is below taxable limit.
Key Takeaways
FD earns more than RD for the same total investment, rate, and tenure.
RD is better for building savings through monthly contributions.
FD requires a lump sum; RD works with monthly savings.
Interest rates may differ between FD and RD at the same bank.
Choose based on your cash position and saving habit, not just returns.
Why This Matters
Choosing between FD and RD based on incorrect assumptions can cost thousands in lost interest. This comparison ensures you pick the right instrument for your cash flow situation.
This calculator is for educational and planning purposes. Consult a qualified professional for personalized advice.